It looks like 2014 is going to be the comeback year for Mergers and Acquisitions.
M&A activity is at a level we haven’t seen since 2007, and the drivers of this are clear—equity values, cross-boarder tax advantages, structural improvements in the economy, and the search for growth, to name a few.
This new activity is coming from all industries—including healthcare, industrials, technology, media, and CPG.
We’ve been tracking the recent rise of M&A deals and put together some tips on how to use brand assets to maximize value and lower risk during M&A transactions.
Three key principles to maximizing the deal:
1. Focus on the value creation logic: How will companies and assets be brought together to create more shareholder value?
2. Trust your customers, not your gut: Every case is different but our experiences is that managers often overestimate the connection customers have with current brands, but at the same time overestimate the time required to make change. Use forward-looking econometric models to accelerate M&A’s decision making.
3. Think about evolving models rather than perfect solutions: It’s naïve to think that a single brand architecture solution is profit maximizing across the entire organization. The strength of each brand can differ widely across geographies and business lines.
If you think about value creation logic, trusting your customer, and evolving models rather than perfect solutions, you can optimize the architecture of your brand assets to capture maximum value from the deal.