Every acquisition provokes a branding decision—should the acquirer absorb the acquired business by renaming it under its ownname to convey to themarket thatownership and theway of doing business has changed, or should it allow the acquired company to continue trading under its old name so as to avoid damage to its existing customer franchise? This is a complex management decision but one which apparently receives little attention. This paper draws on the B2B branding andM&A literatures to create a model of brand equity transfer. The model assumes that rebranding of an acquired company under the name of the newparent can yield positive benefits if the new parent has higher brand equity than the acquired company. A case study of an acquisition of a national construction materials company by a larger international group provides an illustration of the transfer process.

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IMM-06473; No of Pages 6
Industrial Marketing Management xxx (2010) xxx–xxx
Contents lists available at ScienceDirect
Industrial Marketing Management
Leveraging brand equity in business-to-business mergers and acquisitions
Mary C. Lambkin a, Laurent Muzellec b,⁎
a
UCD Michael Smurfit Graduate Business School University College Dublin, Carysfort Avenue, Blackrock, Co. Dublin, Ireland
b
Dublin City University Business School, Glasnevin, Dublin 9, Ireland
a r t i c l e i n f o a b s t r a c t
Article history: Every acquisition provokes a branding decision—should the acquirer absorb the acquired business by renaming it
Received 31 October 2008 under its own name to convey to the market that ownership and the way of doing business has changed, or should
Received in revised form 27 November 2009 it allow the acquired company to continue trading under its old name so as to avoid damage to its existing
Accepted 11 December 2009
customer franchise? This is a complex management decision but one which apparently receives little attention.
Available online xxxx
This paper draws on the B2B branding and M&A literatures to create a model of brand equity transfer. The model
Keywords:
assumes that rebranding of an acquired company under the name of the new parent can yield positive benefits if
B2B branding the new parent has higher brand equity than the acquired company. A case study of an acquisition of a national
Mergers and acquisitions construction materials company by a larger international group provides an illustration of the transfer process.
Rebranding © 2010 Elsevier Inc. All rights reserved.
Brand equity
1. Introduction involved in M&A transactions should be subject to a kind of brand
equity leveraging whereby a deliberate attempt is made to transfer
Merger and acquisition (M&A) activity has increased exponentially the brand equity of the stronger partner to the weaker one, thereby
over the last decade (Martynova and Renneboog, 2007; Hijzen et al., adding value to the whole, combined entity.
2008). This wave of M&A activity has been a global phenomenon that The issues involved in the brand equity transfer process have
has particularly affected industrial markets (Andrade et al., 2001; received some attention in the B2C sector (Jaju et al., 2006; Muzellec &
PriceWaterhouseCooper, 2007). The net effect for the individual Lambkin, 2008), but it is yet to receive any exploration in a B2B
companies involved in all of these M&A deals has been the accumulation context. This paper addresses this gap by focusing on the issue of
of products, brands and locations with widely varying heritages and brand equity transfer following mergers and acquisitions among B2B
differing levels of value. This runs the risk of a dilution in the coherence firms. It starts by reviewing research on brand equity in industrial
of the original brand portfolio which sometimes reaches a point where a markets and links it with the literature on M&A. It then proposes a
rebranding of all or some elements of the brand hierarchy becomes a model of brand equity transfer. A case study based on a large, inter-
managerial necessity (Muzellec & Lambkin, 2006). national construction materials firm which acquired a relatively small,
A review of the available evidence suggests, however, that brand national firm is used to identify which brand equity variables may be
equity is typically not handled very well, tending to be treated as an successfully transferred in a situation where a dominant acquirer
after-thought compared to more pressing financial and operational brand is applied to the weaker acquired firm.
matters (Hise, 1991; Kumar & Blomqvist, 2004; Homburg & Bucerius,
2005). It is usually given low priority in merger negotiations and is
typically decided on the basis of simple expediency after the deal is 2. Leveraging brand equity in B2B markets
concluded, to bring some order to the untidy collections of names and
entities that are inherited as a result of combining two firms and their Companies will likely differ in the levels of brand equity that they
respective products and markets (Knudsen et al., 1997; Ettenson & bring to a merger (Capron & Hulland, 1999; Bahadir, Bharadwaj &
Knowles, 2006). Srivastava, 2008). The most typical situation is one in which a large,
Ideally, however, branding decisions should be driven by market- strong firm acquires a smaller, weaker one with the expectation that the
ing considerations, to use the opportunity to signal a new strategic performance of the acquired firm can be improved by an infusion of
focus to the company's stakeholders and to extract synergies from the skills and resources from the acquirer, thereby providing a gain for the
brand equities of the merged entities. In particular, branding decisions combined entity (Capron & Hulland, 1999; Andrade et al., 2001; Bahadir
et al., 2008).The challenge of managing brand equity in the context of
⁎ Corresponding author.
M&A is to be able to identify and measure the differences in the brand
E-mail addresses: Mary.Lambkin@ucd.ie (M.C. Lambkin), Laurent.Muzellec@dcu.ie equity of the individual firms before the transaction, and to find a way to
(L. Muzellec). transfer the brand equity from the stronger to the weaker firm after the
0019-8501/$ – see front matter © 2010 Elsevier Inc. All rights reserved.
doi:10.1016/j.indmarman.2010.02.020
Please cite this article as: Lambkin, M.C., & Muzellec, L., Leveraging brand equity in business-to-business mergers and acquisitions, Industrial
Marketing Management (2010), doi:10.1016/j.indmarman.2010.02.020

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2 M.C. Lambkin, L. Muzellec / Industrial Marketing Management xxx (2010) xxx–xxx
deal is concluded. The next section considers how brand equity may be the weaker party so as to achieve a positive synergy for the whole
identified, measured and transferred in B2B mergers and acquisitions. combined entity.
2.1. Identifying and measuring brand equity in B2B markets 2.3. Brand equity redeployment model
Almost all conceptualizations of brand equity agree that it involves Existing research on post-merger behaviour and performance comes
the ‘value added to a product by consumers' associations and from several different disciplines making it quite difficult to develop a
perceptions of a particular brand name (Aaker, 1991; Bendixen et al., coherent picture of the current state of knowledge. Economists tend to
2004, Keller, 1993). Whilst the ‘added value’ of brand equity is viewed in consider structural factors such as relative firm size and the relatedness
differing ways, there seems to be a general agreement among all of the merged businesses as key variables likely to influence the pattern
researchers that brand equity outcomes accrue to a product due to the of resource deployment, the realisation of synergies, and post-merger/
set of associations symbolized by its brand name when compared with acquisition performance (Andrade et al., 2001; Kaplan, 2006). Manage-
those that would accrue if the same product did not have that brand ment and organisation scholars tend to focus on the speed and
name (Keller, 2008). effectiveness of the post-acquisition integration process, including the
The most widely accepted brand equity model in the literature is impact on the employees in the merged organisation (Haspeslagh &
Keller's customer-based brand equity (CBBE) model (1993; 2008). Jemison, 1991; Hitt, Harrison, Ireland & Best, 1998; Krishnan, Hitt & Park,
Brand equity has two key components: a high level of awareness and 2007).
strong, favourable and unique brand associations (Keller, 1993). A The limited work by marketing researchers on the subject of M&A
CBBE model for business markets, which focuses on the corporate has tended to focus on the pattern of marketing resource deployment
brand as the unit of analysis has been adapted by Kuhn et al. (2008). following an acquisition (Capron & Hulland, 1999; Homburg & Bucerius,
The corporate brand is emphasized for B2B companies because 2005), and on how customers and consumers might react to the new
business customers tend to assess, value, and make purchasing decisions ownership, specifically, whether the result may be a gain or loss in
based on company-specific images/perceptions (Aspara & Tikkanen, loyalty, as measured by attitude or behaviour (Jaju et al., 2008).
2008). The choice of a single corporate brand is also thought to reflect a In a large study of M&A transactions over 30 years in the United
customer emphasis on risk-reduction rather than on emotional benefits, States, Andrade et al. (2001) found that the acquirers were 10 times
leading them to choose well known brands from reputable companies as a larger than their targets, on average. This suggests a scenario in which
risk reduction strategy (Mudambi, 2002; Beverland et al., 2007; Cretu & large, strong firms acquire smaller weaker ones to expand their business
Brodie, 2007). and to exploit synergies in the combined entity (Capron & Hulland,
In a corporate brand dominant system, the constructs of brand 1999; Basu, 2006). In those situations Capron and Holland (1999) found
associations and corporate reputation are intertwined (Argenti & that redeployment of resources tends to be asymmetrical, with a high
Druckenmiller, 2004; Balmer & Greyser, 2006; Olins, 2000). However, proportion of redeployment from acquirers to targets but very little in
since reputation is an aggregate construct with many components the opposite direction. This sample of firms frequently redeployed
(Cravens, Oliver & Ramamoorti, 2003; Fombrun, Gardberg & Sever, innovation, manufacturing, brand name and marketing resources from
2000), it is useful to identify the key variables involved in the brand acquirers to targets.
equity transfer process in business markets. The general tendency in M&A therefore seems to be that a strong
The challenge of managing brand equity in the context of M&A is to firm acquires a weaker one and seeks to leverage its strength to
be able to identify and measure the differences in the brand equity of enhance the value of the target, and thereby the value of the whole
the individual firms before the transaction, and to find a way to combined entity. Translating this into the context of brand equity
transfer brand equity from one firm to the other.. transfer, we can surmise that the likelihood of rebranding the target
firm with the brand name of the acquirer would also be inversely
2.2. Brand equity transfer in B2B mergers and acquisitions correlated with relative size and strength as shown in Fig. 1 below.
Thus, we would expect a transfer of brand equity from acquirer to
Assuming that individual companies have different scores on the target to be high for relatively small, weak targets and low for
brand equity measurement model at any point in time, then the relatively large, strong targets.
likelihood is that merging companies will differ in the levels of brand
equity that they bring to the merger (Capron & Hulland, 1999; Bahadir 2.4. Implementation issues
et al., 2008). For example, in a study of large M&A transactions in the
United States, Bahadir et al. (2008) found a very wide range of variation It is widely recognised that many M&As fail because they pay
in brand value, from 49% of firm value at one end of the spectrum (in the inadequate attention to “soft” issues such as vision and leadership,
case of P&G's acquisition of Gillette), to less than 1.51% in the acquisition
of Latitude by Cisco Systems.
The source of heterogeneity in the target firm's brand value may be
due to the fact that each brand involved in an M&A transaction has a
different potential for generating future cash flows as a result of
differences in brand specific factors which might be summarised as
differences in brand equity (Srivastava, Shervani & Fahey, 1998; Bahadir
et al., 2008). Another explanation is that firms with stronger marketing
capabilities will attribute higher value to targets' brands because their
expectations of future revenues from a brand portfolio will be higher
than firms with lower marketing capabilities. This stems from the notion
that acquirers with stronger marketing capabilities are able to deploy a
target's brand portfolio more efficiently, which will affect the level,
growth, and volatility of cash flow expectations from the target's brand
portfolio (Bahadir et al., 2008).
The challenge of managing brand equity in the context of M&A is to
be able to find a way to transfer the brand equity from the stronger to Fig. 1. Brand equity redeployment model.
Please cite this article as: Lambkin, M.C., & Muzellec, L., Leveraging brand equity in business-to-business mergers and acquisitions, Industrial
Marketing Management (2010), doi:10.1016/j.indmarman.2010.02.020

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stakeholder communication, employee morale and retention, corpo- The initial data set (cases A and B) consisted of a review of
rate culture, and integration speed and momentum (Balmer & Dinnie, communication materials including brochures, corporate websites and
1999; Krishnan et al., 2007). During the integration phase, managerial annual reports. Semi-structured interviews were also conducted with
energy is often absorbed by internal issues, which can lead managers 12 key stakeholders (five major customers (opinion leaders in the
to neglect customer-related tasks (Hitt, Hoskisson, and Ireland 1990). industry); five employees; and two investment analysts from leading
This strong internal orientation is frequently accompanied by a stockbroker firms).
decline in service quality (Urban & Pratt, 2000). This decline can cause The second data set (case AB) consisted of a review of communi-
customers to question their future relationship with the merging cation materials including internal communications with employees,
firms leading to defection to competitors (Reichheld & Henske, 1991). brochures, corporate websites as well as a two hour in-depth interview
In the worst of situations, the relationship between the two with the CEO of Cemex Ireland. In addition to the questions assessing
organizations becomes contentious; promised synergies remain brand associations and values, questions pertaining to the rebranding
elusive; employees become distrustful and disgruntled; and custo- process were also covered.
mers grow cynical and dissatisfied. With no solid brand platform to
work from, company integration will often be mismanaged, and 3.2. The choice of Cemex/Readymix
communications to key constituencies will necessarily suffer (Etten-
son & Knowles, 2006, Krishnan et al., 2007). The establishment of a This case explores brand transfer following a merger which occurred
strong and clear corporate identity can help mitigate these problems, in 2005, when RMC, the majority shareholder of Readymix plc, was
communicating what the company stands for to customers and acquired by Cemex SA DE CV. Cemex thereby became the majority
employees (Harris & deChernatony, 2001; Rosson & Brooks, 2004). shareholder in Readymix with 62% of the shares.
Whether merging or acquiring companies take advantage of this The Cemex acquisition of Readymix had many features that made it
opportunity to use the corporate identity and communications in a suitable for exploring branding issues in a B2B environment following an
systematic way to manage the transition and to help create a positive M&A transaction. Firstly, Cemex is very much larger than Readymix and
culture for the new entity is an empirical question. therefore met our requirement for size variation between acquirer and
The modest amount of evidence that there is on this topic suggests target. Cemex is a global building materials company that employs
that companies probably do not avail of this mechanism as well as 60,000 people, has a market capitalisation of €10 billion, and operates in
they might (Ettanson and Knowles, 2006; Basu, 2006). However, a more than 50 countries throughout the Americas, Europe, Africa, the
recent study shows that consumers' judgment of the brand equity of Middle East, Asia, and Australia. Readymix, in contrast, is an Irish
the merged firm tended to be higher for firms following an acquirer- company that serves only its domestic market with a small presence in
dominant strategy, that is, firms renamed under the acquirers' name the UK, with 900 employees and a market capitalisation of €69 million.
rather than combined names or the target's name (Jaju et al., 2006). Secondly, Cemex and Readymix are in the same type of business and this
Whether these findings also apply in B2B markets where trade acquisition may be considered horizontal or closely related, that is, its
customers are the target audience rather than consumers is an main objective is to increase market power.
empirical question that this study will try to address.
4. Research results
3. Methodology
4.1. Target company B: the Readymix brand
This research set out to investigate brand equity issues within a
B2B context, in particular, how brand equity is transferred in a Readymix plc is a public company quoted on the Irish Stock
dominant brand equity redeployment situation. A case study Exchange. It is a long established company in the building materials
approach was chosen because of the exploratory nature of the industry. Its main products are ready-mixed concrete, blocks, mortar,
research and of the empirical necessity to investigate the brand equity aggregates, concrete pipes, roof tiles and precast concrete products. It
redeployment model within its real-life B2B context (Yin, 1994). operates in the Republic of Ireland, Northern Ireland and the Isle of Man.
Theoretically, we set out to investigate the applicability of the It has a small precast business in the south of England. Readymix has a
resource redeployment transfer model to brand equity in industrial proliferation of subsidiary brands in its portfolio (Readymix, RMC,
markets and, practically, we tried to explore how brand equity is Concrete pipes, Finlay Breton, Maynooth Tiles, Island Aggregates and so
transferred in the context of a B2B acquisition transaction. on) that lack a unifying theme and may benefit from being brought
together under a coherent umbrella brand. Readymix enjoys a high level
3.1. Data collection and analysis of awareness in the Irish market because of its long history and
established customer relationships. However, the survey of Readymix
Following Yin (1994) guidelines, a case study protocol was followed stakeholders suggested that Readymix was an old brand that has
and included the following steps: Initial meeting with senior manage- evolved over time through a number of acquisitions which have been
ment to agree on research; outline of project, timing and objectives; partially assimilated but not wholly, leaving a rather confused mix of
identification of key informants; collection of data; company documen- names and product lines. The word “readymix” is a generic description
tation collected on site; interviews conducted out of site and post for concrete but the company has a proprietary right to this name, the
interview verification: results and report presented to senior manage- findings indicated that this name retains some customer-based brand
ment. The questions were inspired by Kuhn et al. (2008) method of equity at the product level. The level of equity is attenuated, however, by
assessment of the CBBE in industrial markets. a relatively poor record of customer service and a lack of strong
In order to understand the brand equity transfer in this case, we personalised relationships with company personnel.
investigated brand equity for three entities. “A” represents the brand
equity of the acquirer (Cemex International), “B” represents the target 4.2. Acquirer A: the Cemex (international) brand
company (ReadyMix), and finally “AB” represented the target
company after its rebranding (Cemex Ireland). Data pertaining to Cemex is a large company with an extensive international network
Cemex International and ReadyMix (A and B) were collected in June of companies in 50 countries across five continents. Globally its annual
2006, a period which was after the merger but before the change of production capacity approximates 96 million metric tonnes of cement.
name, data regarding Cemex Ireland (AB) were collected in June 2009, It is quoted on both the New York and Mexican Stock Exchanges (NYSE/
a year following the rebranding of Readymix as Cemex International. Mex Bolsa). It has a strong resource base of technology, skills and
Please cite this article as: Lambkin, M.C., & Muzellec, L., Leveraging brand equity in business-to-business mergers and acquisitions, Industrial
Marketing Management (2010), doi:10.1016/j.indmarman.2010.02.020

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knowledge that it has built up over the years. The company has 4.4. Cemex Ireland: brand transfer outcome
established a major R&D centre near its European headquarters in
Switzerland in 2001 which focuses on new product development, The management of Cemex Ireland believe that the rebranding has
cement process technology, business processes and information had a successful outcome with improvements in the level of brand
technology, sustainability, and energy and CO2 emissions reduction. awareness and a strengthening of brand associations particularly
All customer interviewees were familiar with the Cemex name among the larger, more sophisticated customers which are the most
although they didn't know much about the company other than that it is important segment of the market from Cemex's point of view. The
“large” and “international”. The stockbrokers were not aware of the results of the transfer following the M&A are examined under the
name Cemex but once presented with a few facts about Cemex following headings: corporate reputation and corporate culture.
responded positively to the prospect of a change of name to Cemex;
they thought it would be a good idea if it could be seen to signal a 4.4.1. Corporate reputation
fundamental renewal of the company with the prospect of improved Two dimensions of corporate reputation have been identified as
performance to follow. Employees felt that customers are already aware particularly important in creating positive or negative brand associa-
of Cemex as a large, international company and that this association tions are: corporate ability (Brown & Dacin, 1997), and financial
would raise the stature of Readymix and allow it to stand shoulder-to- position (Fombrun et al., 1993).
shoulder with larger competitors.
In sum, Cemex, was perceived as a very good brand name for a 4.4.1.1. Corporate ability. Cemex Ireland serves two distinct market
company in the cement/building materials industry because it is segments: residential and commercial/infrastructural. There has been
descriptive of the product category as well as being easy to spell, a dramatic collapse in the residential market in Ireland and the only
pronounce and recognise in any geographic region or language. It is significant growth area is in infrastructure projects. Cemex manage-
also known in the industry as a successful, international company and ment believes that they have been gaining market share in the
so brings an established reputation to whatever business it is applied infrastructural segment because of their size, reputation, expertise
to. and international connections. Big infrastructure projects are often
managed as joint ventures between an international corporation and
a local Irish contractor. The name of international brand enhances
4.3. New company AB: Cemex Ireland: brand transfer process brand associations in terms of corporate ability as explained by the
Cemex Ireland CEO: “… what is happening is that the International
The rebranding of ReadyMix into Cemex Ireland was conducted partners have often worked with Cemex in Spain, in the UK, in France
gradually and in a low key manner. The most visible aspect of the brand or Germany so when they arrive here they first say: “Oh! Cemex is
transfer was the change of name to Cemex on the company's stationery here…ok, we have worked with them before and they have been able
and livery. Today 80% of their 183 trucks have been repainted in the to deliver this type of stone, or concrete with those specifications”. Big
Cemex colours and carry the Cemex logo. The company considered that projects also build the word of mouth reputation. Involvement in
the visibility of their fleet on the roads of Ireland was the best way to iconic projects such as a national football stadium or a large bridge, for
inform the market about the rebranding and to build an awareness of example, provides lots of publicity and this, in turn, generates further
the Cemex name. In addition to these visual changes, the change of business.
name was signified to external stakeholders through a letter which was
sent to customers and financial analysts. Due to financial constraints, 4.4.1.2. Financial position. An unanticipated negative transfer has been
however, no major event marked the launch of the new brand. the weak financial reputation of Cemex on international markets. The
Cemex management was well aware of the importance of internal company was on the brink of bankruptcy at one point with debts of
branding and the internalisation of brand values and saw the $15 billion in Australia and the US. Awareness of this fact led some of
rebranding as an opportunity to update and renew commitment to their suppliers in Ireland to refuse to give them credit even though
the Cemex brand values. To that end, the management ran focus Cemex Ireland is technically quite separate from Cemex
groups and did a major launch with the commercial team of the (International).
company: the salespeople, the credit controllers, and other people
who are in contact with customers. This was a one day work shop 4.4.2. Corporate culture
which was not just about the new logo but really about the philosophy The arrival of international managers from Cemex International
behind what is new about the company under the Cemex ownership. brought very different work practices to Readymix and required a
The theme was: “the colors have changed, now we need to change”. huge cultural change. One illustration of this lies in the fact that
The brand associations before the rebranding were, according to Cemex International relies very heavily on systems and data for
the Cemex Ireland CEO: managing their operations all around the world while the local Irish
staff were more used to informal practices. The new management of
• Cemex International: “global, professional, full of energy, driving… Cemex Ireland linked the reward system to this philosophy. Plant
always moving ahead, dynamic”. managers used to be paid by the amount of cubic meters leaving the
• ReadyMix: “local, stable, trustworthy”. doors, rather than the quality, the cost, the accidents, the waste, the
cleanliness of the plant, so, not surprisingly, they had 12% of wasted
The desired brand associations for the future, following the concrete. The new tighter system is now starting to become accepted
rebranding were for Cemex Ireland to be regarded as a trustworthy and there are improvements in all of the key operational performance
organization as before, but also as a dynamic, innovative organization, metrics.
combining the best of Cemex International with the established
reputation of the local company. 5. Theoretical and managerial implications: brand transfer in B2B
Cemex Ireland also combined the rebranding with the launch of a M&A
corporate social responsibility program with local communities and
government agencies. They sponsored local sports and community 5.1. Theoretical implications
initiatives in areas where they have quarries, cement factories and
distribution depots. They also engaged with government organiza- The first objective of the study was to determine which elements
tions involved in research and policy on the built environment. of brand equity may be considered transferable in a B2B context. The
Please cite this article as: Lambkin, M.C., & Muzellec, L., Leveraging brand equity in business-to-business mergers and acquisitions, Industrial
Marketing Management (2010), doi:10.1016/j.indmarman.2010.02.020

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one immediate obvious answer is that the brand name is transferred brand power was not quantitatively assessed in this study, this would
and that this embodies the value that is described as brand equity. suggest a strengthening of the brand equity.
Evidence from our research, however, suggests that most acquisitions Business stakeholders are also aware of the possible synergies among
involve a transfer of a wider range of marketing assets, often but not the various elements of a brand portfolio. Since corporate reputation
always in support of a brand name transfer. For example, Capron and drives brand equity in B2B markets, the adoption of a single name across
Hulland (1999) examined the extent to which firms redeployed three an entire product line is recognised as having some major benefit for both
key marketing resources (brands, sales forces, and general marketing buyers and suppliers. Corporate rebranding following an M&A transaction
expertise) following horizontal acquisitions. may also be better accepted in a B2B environment. A merger is a major
In our study some slightly different elements of brand equity transfer event which seldom occurs in the lifetime of any corporation. This study
were also observed. First, perceptions of corporate ability—the com- shows that, used as a means to signify a new strategic decision, a new
pany's capabilities for producing high quality products—may improve as corporate name can be quickly accepted and endorsed by the internal and
a result of a dominant brand redeployment exercise. The study shows external stakeholders.
that what consumers know about the acquiring company can influence In sum, this case study provides a very positive view on the use of
their beliefs about and attitudes toward new products manufactured by rebranding as a strategic tool to rationalise and integrate a complex mix
the acquired company. From a brand management viewpoint, the of businesses accumulated through a series of mergers and acquisitions.
acquirer company's expertise in producing and delivering its output can It also demonstrates the symbolic value of an acquirer-dominant
be leveraged for a positive gain in equity. In this example, the expanded rebranding as a means of communicating positive intent both to
geographic coverage as well as the ability to leverage on the employees and the stock market. The conclusion that we have reached is
international presence was associated with a positive brand redeploy- that, in a B2B environment, ambitious, acquisitive companies should go
ment from acquirer to target. forward confidently to reconfigure their businesses so as to maximise
Secondly, the financial position, which is a key variable in the coherence and efficiency and should look to their brand strategy as a key
measurement of corporate reputation (Fombrun et al., 2000) can also tool in implementing their corporate strategy.
be leveraged.
Adding these variables together with other know-how variables 6. Conclusions and directions for further research
gives us a model of brand equity transfer that suggests which variables
are likely to be transferred from acquirer to target. This is illustrated in Although this study reports some interesting findings, there is
Fig. 2. obviously considerable scope for further research to validate these
findings. First, although the qualitative nature of the research has
5.2. Managerial implications allowed us to explore the phenomenon in depth and appreciate its
complexity, a large quantitative study would further validate our initial
The positive response of all three groups of respondents (employees, findings. Our conclusion rests on the assumption that the brand
customers and financial community) towards the rebranding of reputation and associations are correlated to brand equity as posed in
ReadyMix under the acquirer's brand name (Cemex) contrasts with customer brand equity models (Kuhn et al., 2008). A quantitative
several rebranding failures in the B2C sectors. The rebranding of the UK approach would confirm whether the observed weakening of brand
post office (to Consignia), BT Cellnet (to O2), ONdigital (to ITV Digital), associations also corresponds to a loss of brand equity.
Payless Drug Store (to Rite Aid) were catalogued as rebranding failures
because the change of name led to brand equity dilution (Haig, 2003). Acknowledgement
Similarly an experiment conducted by Jaju et al. (2006) demonstrated
that a dominant acquirer branding strategy could lead to a substantial The authors wish to thank the reviewers and editors for their
decrease in consumer-based brand equity where there was a bad fit constructive comments.
between the firms and a mismatch in the attitudes of the customers of
the merged entities.
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Please cite this article as: Lambkin, M.C., & Muzellec, L., Leveraging brand equity in business-to-business mergers and acquisitions, Industrial
Marketing Management (2010), doi:10.1016/j.indmarman.2010.02.020