Lack of brand and culture considerations causes major M&A failure

In an Expert View column, Helen Westropp, managing partner of branding agency Coley Porter Bell, describes how tens of millions of dollars are wasted in M&A deals every year when acquirers fail to understand the value in the brand and culture of the business they are buying. This is particularly the case in pharma and biotech businesses.

Close to 90% of all M&A deals never get off the ground. And seven out of 10 fail to create long-term shareholder value (according to KPMG). This is often because there is a concentration during M&A deals on the hard factors – extensive due diligence and attention to market considerations, financial calculations, cost-saving opportunities, balance sheet and legal issues – while brand and brand strategy is often overlooked or only evaluated post M&A.

The ideal time to consider the real worth of soft factors, such as brand, culture and people is during due diligence or even better when the target has been formally selected and vetted, rather than later.