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Untapped value in M&A

John Breen and Dominic Leung
Mergers, acquisitions, and divestitures continue to accelerate in healthcare. As the role of the corporate brand becomes an increasingly meaningful choice driver and connector, its value to the bottom line becomes more apparent. Has the time now come to seriously consider the strategic role corporate brand can play in optimizing the potential value of a merger or acquisition? Can brand be the difference?

Potential for corporate brand in M&A

In 2015, mergers and acquisitions (M&A) in the biopharmaceutical industry were robust. In the first half of 2015, deals were nearly three times higher than in 2014, at USD $221 billion, according to KPMG. This upward trend in M&A shows no sign of slowing. Market analysts predict biopharmaceutical mergers and acquisitions will reach more than USD $230 billion in 2016–2017.

In light of this surge, business leaders need to understand how the role of their own corporate brands and their future M&A targets’ brands can generate value for their corporations.

Corporate brands are the basis of an emotional connection between a company and its customers. They create a different kind of value for customers: How the company delivers on its promise to people and to the world.

The corporate brand can be a strong predictor of customer loyalty and indicator of a company’s ability to withstand market changes. Internally, a strong brand that defines and drives employee behaviors can have a significant impact on how change needs to be managed.

Cross-industry studies suggest that seventy percent of major acquisitions fail to deliver maximum value to shareholders.

Could sound brand management be a missing and overlooked piece in the M&A puzzle?


For a complete copy of this article, please download the Best Pharma Brands report.

Executive Director, Brand Intelligence & Experience
Senior Director, Strategy