We have seen some of the biggest mergers and acquisitions in the last decade. Just look at some of the headlines in the business section – “Coca-Cola is buying Costa Coffee for $5 billion”, “Shareholders approve Disney’s purchase of most of 21st Century Fox”, “AT&T completes acquisition of Time Warner”, and there’s more.

While the financial and operational transitions after M&A have a huge impact on the success of the newly-consolidated company, the transitions of the brands involved in the deal (usually a lot more than the number of companies involved) are just as crucial. How can a company make sure the overall brand equity increases because of the M&A? Can one plus one be greater than two?

From an internal branding standpoint, we have suggested a culture-first mindset for branding in times of M&A and introduced the foundation for companies to rally from the inside out. For external stakeholders – consumers, partners, and investors – we at Labbrand place naming at the center of the branding process and consider naming as the most essential carrier of all brand equity. Here we lay out four key post-M&A naming approaches seen in many high-profile cases over the years. 

Approach 1: Little or No Change

While the notion of little or no change at all as a post-M&A naming solution sounds dull, but sometimes inaction can be the best strategy for a considerable period of time, especially when the M&A takes place in the following scenarios:

• The parent company applies a house of brand model while the acquisition offers unique benefits that complement the “house”. Example: P&G and Gillette; Unilever and Dollar Shave Club
• The acquisition’s brand equity is actually much stronger than the parent company. It makes more business sense to down-play the association in order to avoid brand equity dilution. Example: Geely and Volvo Cars
• The two parties offer vastly different brand propositions within the same or adjacent industry category, and the M&A itself aims at reaching as many consumers as possible by differentiating positionings. Example: Amazon and Whole Foods Market.

Approach 1: Little or No Change

In some cases, while no name change takes place, an endorsement from the parent company would appear on the acquisition’s brand signature either to raise the acquiree’s brand esteem, or to boost the parent company’s brand influence, hence strengthening post-M&A brand equity overall. For example, “an IBM company” appeared on Ustream’s brand signature for about two years before the live video streaming company became IBM Cloud Video for good; Viewers will see “a Comcast company” under Universal Pictures’ iconic globe during the opening of the film studio’s movies.
 

Approach 2: Stronger Horse Wins

Should a company buy a brand just to kill it? This aggressive approach makes sense if the value of M&A is relatively small, particularly in these scenarios:

• The acquired brand equity does not have a high value to begin with, or has some image problems that cause the devaluation of the main brand. Often in these cases the target of the acquisition is assets like intellectual property, clientele, technology and expertise, rather than the brand. Example: Barclays and Lehman Brothers
• The takeover aims to nudge competition by consolidating the power into one brand. Example: Delta Air Lines and Northwest Airlines

In some cases, the disappearing brand’s legacy will prevail visually while its name will not. For example, the Boeing’s current brand identity incorporates Boeing’s original typography with a stylized symbol of the aerospace manufacturer McDonnell Douglas, which was merged with Boeing in 1997.