First quantitative M&A brand study of S&P Global 100 shows 74 percent rebrand post-acquisition; sector, deal size, and appetite key factors
(Thomson Reuters ONE) -
* The Landor M&A Brand Study is a first in providing an objective benchmark
for the relationship between acquisitions and brand evolution.
* Shows specific acquirer trends by industry; consumer companies are less
likely to change acquired brand, while energy and utilities sectors are
fastest to rebrand.
* Mergers of equals result in rebrands nearly 40 percent of the time.
* More than half of all acquisitions are rebranded in the first three years of
purchase.
* Highly acquisitive companies transition acquired brands more quickly than
those who complete fewer transactions.
* Deal size matters: With deals under $1 billion, brands are changed 78
percent of the time, compared to 46 percent with transactions greater than
$5 billion.
An infographic accompanying this announcement is available
at http://www.globenewswire.com/NewsRoom/AttachmentNg/3f5ace4b-13c5-461b-afff-
24202c7e0ebc
NEW YORK, Oct. 10, 2017 (GLOBE NEWSWIRE) -- In 2015 and 2016, mergers and
acquisitions accounted for more than $8 trillion of business value. But while
extensive due diligence and planning is given to financials and other factors
during the deal-making process, brand strategy considerations are often
overlooked or only evaluated post-M&A. This is due, in part, to a lack of
relevant data for analysis. Nevertheless, the success of the transaction-and the
amount of value that it generates, both in the short and long term-is a result
of deciding if, when, or how to transition an acquired brand.
To better equip CEOs, boards of directors, and legal and financial advisors with
strategies for making acquisitions, Landor, a leading global brand strategy and
design firm, conducted the first in-depth quantitative analysis of M&A activity.
Leveraging machine learning, Landor analyzed the behavior of S&P Global 100
companies over the past 10 years. While 74 percent of all companies rebranded
the acquired asset within the first seven years, the data reveals more nuanced
approaches to rebranding and specific trends by sector.
Acquirers within an industry behave similarly
The Landor M&A Brand Study uncovered distinct patterns by industry. More than
any other sector, consumer companies (defined as consumer discretionary and
consumer retail) are more likely to retain their acquired brands. Just under 60
percent of consumer companies rebrand, indicating that they want to retain the
equity of their acquired brands and a portfolio of brands is a model this
vertical finds successful. Coca-Cola's acquisition of the organic tea company
Honest Tea is an example. The deal was completed in 2011, and the parent company
has not made any significant branding changes.
The IT, financial services, health care, and energy sectors display the highest
likelihood of changing an acquired brand, transitioning between 75 percent and
80 percent of acquisitions. These industries place more value on the acquirer
than the acquired brand; the numbers demonstrate a propensity to start
transitioning a brand as soon as the deal closes. Capital One completed its
acquisition of ING Direct in February 2012 and soon after rebranded it Capital
One 360. IBM has been on an acquisition spree over the past year, buying
companies such as Clearleap, now known as IBM Cloud Video.
The energy and utilities sector is quickest to rebrand acquired companies, with
60 percent of brands changed within 12 months, according to the study. IT
companies exhibit less urgency, transitioning half of acquired brands within the
first year and 76 percent by year seven. Health care and financial services
companies show similar behavior. Interestingly, telecommunications and
industrial companies are slowest to change acquired brands, with a respective 8
percent and 24 percent of acquisitions transitioned within the first 12 months.
"In 2016, business leaders made thousands of decisions about what to do with
acquired brands-but how do they really know which decisions are best? Our study
clearly shows that different industries do different things. Being able to share
quantitative trend data by sector over the last decade will finally enable CEOs,
boards, and advisors to make more informed decisions about brand strategy when
considering M&A," notes Lois Jacobs, CEO of Landor. "Whether a company is
deciding if it should keep or divest a brand, how quickly to transition an
acquired brand, or how to preserve brand equity, overlooking strategic brand
decisions during the M&A process can negatively impact brand value and leave
money on the table."
"There is no single, cookie-cutter approach to brand strategy during a merger or
acquisition," says Louis Sciullo, executive director of financial services at
Landor. "The ideal approach to brand acquisition strategy comes from a thorough
understanding of the unique combination of factors specific to the acquiring and
target companies. Now that real data is available, we can benchmark how
individual companies and sectors treat M&A brand decisions-and layer that data
into custom analyses bespoke to specific companies and deals."
Deal size, type, and volume correlate with likelihood of rebranding
Generally, the larger the transaction, the longer the transition time. Mergers
of equals result in brand transitions a surprising 38 percent of the time. In
theory, a merger of equals should be a simple conflation of the two existing
brand names; for example, Alcatel-Lucent, DaimlerChrysler, and MillerCoors. But
the fact that nearly 40 percent of mergers opt to rebrand reflects a desire to
create a new, future-focused source of value-from the brand as well as the
business.
A smaller deal is highly indicative of the likelihood of changing the acquired
brand: 78 percent of transactions under $99 million were rebranded compared to
only 46 percent of transactions over $5 billion. Highly acquisitive companies
such as Alphabet and Microsoft display a greater propensity to rebrand, at a
rate of more than 80 percent. Alphabet's brand architecture strategy is
particularly interesting, with Google rebranding its corporate identity to
facilitate M&A activity.
Landor's M&A database offers a range of insights
The study's database holds information on sector and company-specific brand
transition factors during acquisitions, including target geography, strategic
rationale, size of deal, type of deal, number of acquisitions made by company,
and timeline for brand transition if implemented.
"Our study gives CEOs, corporate strategists, and M&A advisors a quantitative
benchmark for comparison," says Sciullo. "It can help them see how competitors
in their sector-and companies in other industries-have handled M&A, and which
strategies have resulted in successful acquisitions. To maximize value for
companies during an M&A, it's important that brand strategy be an ingredient
throughout the deal process-not an afterthought."
For the study, Landor's methodology leveraged machine learning and big data to
analyze 10 years of M&A activity from the S&P Global 100. The index was chosen
because it measures the performance of multinational, blue-chip companies of
major importance in the global equity markets. More than 2,300 acquisitions were
taken into account, with brand strategy insights derived from more than 120,000
sources of unstructured data, including press releases, 3,000 web documents,
5,000 financial statements, and 2,000 investor presentations. The result is a
definitive benchmark of M&A activity and its impact on brands and brand
integrations of the leading companies across different industries, including
Alphabet, Apple, Chevron, Dow Chemical, GE, JPMorgan Chase, PepsiCo, Pfizer,
Procter & Gamble, Texas Instruments, Visa, and Vodafone.
For more information, contact:
Trevor Wade
Global Marketing Director
Trevor.Wade(at)Landor.com
About Landor
A global leader in brand consulting and design, Landor helps clients create
agile brands that thrive in today's dynamic, disruptive marketplace.
Brand can accelerate the success of an M&A, so Landor partners closely with
clients early on to ensure that brand is at the heart of integration strategies.
Landor has helped companies such as Alcatel+Lucent, Alcoa+Arconic, Amoco+BP,
Bayer+Covestro, DNV+GL, and Siemens+Primetals through mergers, acquisitions, and
spin-offs.
Landor offers a range of M&A-specific services that include brand due diligence,
brand valuation, portfolio optimization, future market modeling, and brand
engagement. Our expertise also encompasses insights and analytics; strategy and
positioning; brand architecture; innovation; identity; prototyping; naming and
verbal identity; packaging; adaptation and implementation; environments and
experiences; and new and interactive media.
Founded by Walter Landor in 1941, Landor pioneered many of the research, design,
and consulting methods that are now standard in the branding industry. Today,
Landor has 26 offices in 19 countries, working with a broad spectrum of world-
famous brands, including Barclays, Bayer, BBC, BMW, BP, FedEx, GE, Kraft Heinz,
Huawei Technologies, Marriott International, Nike, Pernod Ricard, Procter &
Gamble, S&P Global, Samsung, Sony, and Taj Group.
Landor is a member of WPP, the world's largest marketing and communications
firm. For more information, please visit Landor.com and follow Landor
on LinkedIn, Facebook, Twitter, and Instagram.
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Landor via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 10.10.2017 - 15:15 Uhr
Sprache: Deutsch
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