How branding affects post-merger health of firms

When the two greats of the global publishing market came together to form Penguin Random House recently, who would have thought their double-barreled identity would add to their brand value instead of diluting it? A study by Natalie Mizik, Jonathan Knowles and Isaac M Dinner says that the choice of corporate branding after a merger is very important as it can help secure the loyalty of employees, customers and investors. Analysing data from 216 large mergers, the researchers said that three branding trends emerge — where one company’s identity was discarded, where both firms operated under their own identities, and where both their identities were amalgamated to create a new brand. They found that brands in the first two categories underperformed compared with the amalgamated category.

Title: Value implications of corporate branding in mergers

Source: Social Science Research Network