Combining Company Names And/Or Logos
What are the pros and cons of these different approaches?
- Keeping the acquirer’s name is the simplest approach, and it is often a wise course for high-profile companies that buy low-profile companies—or for companies that buy firms that are very similar to them, when nothing can be gained from incorporating the target company’s brand name. The chief drawback will be a sense of loss by the acquired company’s employees. There is also a dollars-and-cents issue for the company as a whole and its owners: if the selling company has name recognition, as most companies worth buying do, the value of this trade name might be diminished, along with any trademark value it may have.
- Adopting the seller’s name is good for acquirers that need to gain cachet from the seller’s company. The chief advantages and disadvantages here are the same as in the first example, but with acquirer and seller roles reversed.
- Putting the two names together, with or without acronyms, has the advantage of bolstering the pride of both parties. On the other hand, it poses the challenge of a dual identity to be understood both within and outside the company.
- Creating an entirely new name avoids this challenge while creating another one: what to call the new company. Of all the communication challenges facing newly combined companies, this one is paramount. (In fact, the comprehensive communications grid that appears in Exhibit 9-1 was originally developed as a grid to announce company name changes.) In this option, the potential sense of loss is doubled. Employees from both the acquired and the acquiring company may feel a sense of abandonment. And customers may not like—or even recognize—the name of the merged company.