There are enormous challenges integrating brands. According to McKinsey & Co., nearly 80% of mergers don’t earn back the costs of the deal itself, and a recent study by Booz-Allen & Hamilton revealed that over 70% of merger objectives go unmet.
So what’s the best solution to support and guide the transaction?
For mergers and acquisitions to be successful, a solid brand strategy is integral. Brands typically follow one of four strategies when merging:
- Brand competition (both brands remain the same),
- Brand dominance (one brand is dissolved),
- Brand merger (both brands are combined to create a new brand), and
- Brand creation (both brands are replaced).
But the most important elements in merging brands are evaluation and communication. Will one brand negatively or positively affect the other brand? An analysis of the strength of each brand and the value it provides its customers will inform the answer. Being able to communicate the new strategic direction to both employees and the public will increase customer retention and employee satisfaction, and ultimately lead to the success of the merger.
A few years back, MetaDesign led the brand strategy for the merger of Atel and EOS, which became known as the biggest electricity deal in Swiss history. An exhaustive brand audit, market research, and meetings with executive leadership determined brand creation was the optimal brand merger strategy.
We named the new company Alpiq to symbolize the Swiss heritage of each company, and developed a new brand that showcased the strength of both Atel and EOS. Alpiq remains the market leader in Switzerland and is one of the leading companies in Europe.
Why was this merger so successful? Because Atel and EOS leadership teams addressed brand management as an integral part of the merger process.
Simply put: Successful brand management = successful merger.