Insight

How branding affects post-merger health of firms

Will the choice of corporate branding after a merger help secure the loyalty of employees, customers and investors?

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

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