Jonathan McGrain
PRINCIPAL, CAMBER STRATEGY
What happens to brands after a deal should be a strategic decision.
Mergers and acquisitions require countless decisions about valuation, operations, technology, and people. Yet one decision with lasting consequences for the combined business is often left until late in the process: what to do with the brands.
Will one company’s brand be retained and the other retired? Will both brands survive? Or does the transaction create an opportunity to establish an entirely new identity?
Sometimes, these questions are dismissed as “marketing’s problem.” But the answers can affect customer retention, employee confidence, competitive positioning, and, ultimately, the value created by the deal.
Brand strategy should be an integral part of the deal itself, reflecting both the rationale for the transaction and the future direction of the combined business.
What the research shows
A Siegel+Gale study examined branding decisions in US mergers and acquisitions between 2019 and 2023. Across the industries studied, entirely new brands emerged from no more than 2% of transactions.
In financial services, 50% of transactions maintained separate brands, while 23% absorbed the acquired company into the buyer's existing brand.
These findings aren't necessarily evidence of poor decisions. Preserving established brands may be the right choice, particularly when they have strong customer relationships, valuable market recognition, or distinct competitive positions. Creating a new brand can be costly and disruptive, and shouldn't be undertaken simply to mark a change in ownership.
The more important question is whether the decision follows from a thoughtful assessment of the transaction's strategic objectives, or is driven by convenience, cost, or the relative influence of the parties involved.
Choosing a brand strategy
Every transaction presents different circumstances, but the available approaches generally fall into four categories
1. Retain one brand
The combined organization adopts one of the existing identities, typically that of the acquirer. This can preserve established brand equity, minimize transition costs, and simplify integration. But retiring a familiar brand can also unsettle customers and employees, particularly if the acquired company has a strong identity of its own.
2. Create a new brand
A new identity may be appropriate when a transaction creates a substantially different business, changes the competitive positioning, or brings together companies of comparable stature. It provides an opportunity to define the combined organization without favoring either predecessor. The trade-off is the investment required to establish awareness, credibility, and trust.
3. Maintain separate brands
Companies may choose to retain distinct identities to serve different customer segments, markets, or distribution channels. This approach can preserve valuable brand equity and minimize disruption, but it may also limit opportunities to establish a unified market position and capture operating efficiencies
4. Adopt a hybrid or endorsed approach
A combined identity, or an arrangement in which one brand is visibly associated with another, can help transfer established brand equity while introducing a new organizational structure. These approaches can provide continuity during a transition, although they also risk creating complexity and confusion if the relationships between brands aren't clear.
There’s no universally correct choice. The decision should reflect the value of the existing brands, the competitive position of the combined company, and the objectives of the transaction.
Timing matters
The choice of brand strategy is only part of the equation. Companies must also decide when and how to implement it.
McKinsey research found that approximately 75% of companies take a gradual approach to brand transitions, allowing customers time to understand the change and transfer their loyalty to the new organization.
The remaining 25% adopt a more immediate, or "big-bang," approach. This can accelerate integration, reduce the cost and complexity of maintaining multiple identities, and capitalize on the attention surrounding a transaction.
Neither approach is inherently better. A gradual transition may be appropriate when substantial brand equity is at risk, while an immediate change may make sense when speed, simplicity, or a fundamental shift in market positioning is more important.
Perhaps more concerning, the same McKinsey research found that only 40% of companies reported using a fact-based approach to determining their post-merger brand positioning. This suggests that many companies make consequential brand decisions without fully evaluating the alternatives.
Beyond the name and logo
The most visible outcome of an M&A brand decision is often a new name, logo, or visual identity. But these are expressions of a more fundamental choice about what the combined company intends to become.
A merger or acquisition can change a company's capabilities, customer base, geographic reach, and competitive position. Brand strategy should account for those changes and help establish a shared understanding of the new organization, both internally and externally.
That means addressing questions that extend well beyond corporate identity. How will the combined company describe its value to customers? What elements of each organization's culture should be preserved? How will employees understand and support the new direction? And what should investors and other stakeholders expect from the business?
Without that alignment, even a carefully designed new identity may amount to little more than a cosmetic change.
Bring brand into the deal discussion
Brand strategy belongs alongside the other major decisions about how two businesses will come together. It should reflect the rationale for the transaction, the value of the existing brands, and the market position the combined company intends to occupy.
Before the integration plan is finalized, leadership should be able to answer three questions:
What brand strategy best supports the objectives of the transaction?
What existing brand equity needs to be preserved, and what should change?
How will we manage the transition for customers, employees, and other stakeholders?
These questions become harder to answer once integration is underway and decisions have already been made about names, systems, organizational structures, and communications.
A merger is an opportunity to reconsider how a company presents itself to the market. Whether the right answer is to preserve an existing brand, combine identities, or establish something new, the choice should be made deliberately — and early enough to influence the integration strategy.
