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Using Brand to Drive M&A Value
The document discusses the strategic importance of branding during mergers and acquisitions (M&A), emphasizing how effective brand decisions can enhance financial value for companies. It outlines key decisions for branding, including naming, portfolio integration, and market positioning, while also providing a case study on the financial impacts of brand scenarios. Additionally, it highlights the purpose and vision for a new agricultural company, Corteva, and underscores the significance of a cohesive corporate brand identity.
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Using Brand to Drive M&A Value
- 1. Powered by Conversations ThatMatter: Merging for Growth
- 2. Welcome Dayoán Daumont Consulting Partner,EMEA Ogilvy Consulting Joanna Seddon Global Managing Director, Principal, Global Brand Strategy Ogilvy Consulting Nik Gharekhan Global Consulting Partner Ogilvy Consulting
- 3. Tell us where you aredialing in from! What’s the weather like in your city?
- 4. Do you want this deck? GlobalOgilvy Website https://www.ogilvy.com/ideas
- 5. 5 Using Brand toMaximize M&A Value M&A is a moment when brand rises to the top of the corporate agenda— a point where brand decisions can add or subtract significant financial value Ogilvy Consulting specializes in addressing M&A-related opportunities & challenges, in ways which resonate with CEOs, CFOs and Boards Our experience spans many types of transaction—from acquisitions, to IPOs and divestitures, to joint ventures and private equity We help client organize their brand portfolios & architectures to maximize the value of their transactions, soup to nuts—from brand naming decisions, to brand creation, and go- to-market strategy
- 6. 6 Decisions That Haveto be Made • Determine what brand name & architecture will do most to drive success, minimize risk, and grow share price among investors The brand naming decision • Translate strategy into a positioning which will communicate the purpose of the merged business in a clear, compelling & differentiated manner to all stakeholders Future vision & purpose • Create a powerful new name(s) if needed • Design / evolve logo and brand identity in a way that will communicate the strategy and signal positive change to all stakeholders Brand creation • Define how the merged businesses will go-to-market with their products & services, aligning the brands & naming system in a way that will do most to drive sales & margins with customers Portfolio integration • Develop a roll-out plan to implement the new strategy, specifying investment levels, timing & interim stages, and how success should be measured Execution• Quantify the financial impact of alternative brand strategy scenarios • Provide a facts & figures based rationale for recommendations Financial impact Customer value proposition • Explain the benefits which the merger brings to reassure & retain existing customers, acquire new ones, and grow share Employee value proposition • Engage & energize employees, and build allegiance to the merged company
- 7. 7 There is NoOne Right Answer 7 + + + + - + + New brand
- 8. Bringing it tolife a case study
- 9. The financial upside/ downside impact of the naming decision was significant Revenues without brand Upside from brand Pro-forma total revenues Total RevenuesRevenuesdriven by brand Remaining revenues Revenue upside potential ($B) Revenues at risk ($B) 9
- 10. Corporate brand namingscenarios were analyzed 1. 2. 3. 4. New Name 10 CORPORATE BRAND SCENARIOS
- 11. Using a newbrand will deliver the most value by allowing: • Repositioning as the market shaper • Creating a best-in-class brand Using the DuPont brand will negatively impact financial value: • The incremental value from a new brand is 1/3 higher than the best scenario involving DuPont + Pioneer 4 6 8 9 11 As-Is Scenario 1A Scenario 1B (DuPont) (DuPont + Pioneer) Scenario 2 (Dow) Scenario 3 (Pioneer) Scenario 4 (New Brand) Incremental Brand Value +$XB $ (billions) ESTIMATED BRAND VALUE BY SCENARIO Recommendation Develop a new corporate brand for the new agricultural company X X X X X X 11
- 12. Corporate brand Business-level brands Productbrands Trademarks Seed company brands AgCo - The opportunity Clarify, simplify and unify the brand strategy to signal the strength of the combined portfolio 12
- 13. 13 Expectations for afuture agriculture industry leader • Global – able to manage product flows across shifting geographies, trade flows, crops, weather patterns, etc. • Integrated – able to offer a variety of solutions (CP, Seed, Tech and Advice) in a single package • A technology company – both IT & tech (able to harness technology to make big data happen for farmers) • A biotech company – leading the way in product innovation • A partner – working down the value chain with all industry participants • A global citizen – working with governments and NGOs to find ways of making agriculture answer the needs of all • AND, with all this, a relationship business, attuned to adapting every solution to local farmer needs
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- 15. 15 Food is themost basic human need, the engine of life, and the prerequisite for progress. The agriculture which produces it is the foundational industry, the springboard for economic growth and the development of society. We bring our global presence, depth of knowledge and diverse resources so that farms and farmers flourish everywhere, moving our world forward. We are growing progress. Transformation: We will harness our heritage and knowledge, continuously accelerating our innovation, to transform and advance agriculture in ways unthought-of today Responsibility: We are contributing to responsible agriculture that will use resources wisely, conserve diversity and enrich the land, ensuring food security and safety for future generations, across the developed and developing world Food System: We are connecting the dots across the value chain, collaborating tirelessly with all its participants – from farmers and distributors to manufacturers and retailers – to optimize the food supply and unlock hidden value for all Serving the Industry: Our role is a humble one – to serve and support our customers and partners, using our knowledge and resources to enhance the livelihoods of those who produce and those who consume Radical Openness: We are dedicated to integrity in agriculture, creating transparency and understanding among decision-makers and consumers, restoring a sense of pride and purpose, moving agriculture confidently forward to the future Growing Progress Our positioning
- 16. 16 Name reveal… CORTEVA • Aname which tells a story • A name which communicates our Positioning and Purpose • “Core” suggests ”core” or “heart” of the earth • “Teva” is an ancient word, which fits our 14000 year-old industry. It comes from an ancient Hebrew word which means “everything nature” • Works well in all our key languages • Is completely different from anything else in the category • Sounds strong--hard beginning and ending consonants (“c” and “v”)
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- 19. 19 For Integration PlanningPurposesOnly – Subject to Dow-DuPont Confidentiality Agreement dated November 24, 2015 Employee Brand – Growers of What’s Next
- 20. Messaging for allkey stakeholders 20
- 21. Responsibility strategy An overallresponsibility strategy was developed for the company, around the idea of socially responsible food. Climate change was identified as the priority platform for the company, given agriculture’s significant impact on GHG (12.5% of world-wide emissions) Results Actions: • Innovative technologies that allow for carbon-mitigation • Development of crop management techniques that contribute to carbon capture Events: • Showcase the CEO • Highlight initiatives Corteva is seen as a leader in pushing the agriculture industry to address climate change 21
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- 24. Bringing it tolife a case study
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- 26. 27 Research showed thatbrand matters Consumer Decision Drivers Innovative approaches to insurance Recommended by friends & family Been around a long time Well-known brand Lowest cost policies Cares about me Financially stable company Knowledgeable and friendly agents Simple claims processing Easy to buy Excellent customer service Covers everything I expect Best reputation Highest quality Easy to understand Peace of mind Good value Policies that meet my needs Brand-related Cost-related Service-related Product-related
- 27. 28 Many brand naming& architecture options were analyzed Option 1: Globe Life unitary brand Option 3: Globe Life brand endorsement Option 2: Globe Life cobrand Option 4: Globe Life + American Income Life Option 6: New brand Option 5: Channel branding strategy Liberty National Globe Life Globe Life | Liberty NationalGlobe Life Globe Life + American Income Life Globe Life + Existing Agency brand New brand
- 28. 29 The financial impactof each was quantified $- $500 $1,000 $1,500 $2,000 Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5 Scenario 6 NPV Projected Margin from Net Sales Attributed to Brand ($M) Globe Life unitary brand Globe Life cobrand Globe Life brand endorsement Hybrid - Globe Life + AIL brand Channel branding strategy New brand
- 29. 30 Option Rationale Outcome 1.Globe Life unitary brand • Easiest way to creates a strong national brand • Greater recognition of Globe Life benefits all businesses • Potential to create significant value, at moderate risk • Increases the effectiveness of marketing investment • Easier for investors to understand breadth of portfolio • Has the potential to be implemented short-term leaving a window open for later changes, if needed Globe Life unitary brand was selected as the final destination The decision was to transition to a Globe Life unitary brand
- 30. 31 A new brandnarrative You wake up every morning with your family on your mind. You fight through rivers of traffic and spend all day, every day, on the job so that they can have a better life than the one you’ve had. It’s important to you to provide a legacy of strong financial security. Buying insurance seems like it could be a critical piece of building that legacy, but it’s such an intimidating process. All the different options and the complexity and jargon of the policies can be overwhelming if you’re not used to it. Not to mention, it’s expensive. For the ones who keep America going everyday, running our factories, keeping us safe, and caring for our families, it feels like insurance companies just don’t have people like you in mind. All working families want is a simple policy that fits their needs at a reasonable price. It shouldn’t be so hard to find one. Globe Life understands what you’re going through. We level the playing field in the insurance industry. We know that working families have the same hopes, dreams, and aspirations as everyone else, but go about achieving them in their own ways. Your insurance should reflect that. We provide insurance solutions centered around the way you live. They’re easy to understand and priced to accommodate your budget. By offering quality, affordable insurance policies, Globe Life allows working families to face the unexpected from a position of strength. And having that protection makes all the difference in the world. If the unforeseen strikes, you don’t have to worry about your bills getting paid or the lights staying on. You won’t have to make tradeoffs on essentials like your children’s school supplies or the food on your table. Our policies provide a boost to keep you afloat in times of crisis. Knowing you’re protected, you can focus on what’s most important: building on the progress you’ve made through the years so your family can create an even better future moving forward. That’s a legacy you can be proud of.
- 31. 32 Brand house 32 BRAND PURPOSE Help workingclass families achieve financial protection from adverse circumstances. BRAND POSITIONING Globe Life provides quality, affordable insurance policies to working families, giving them the ability to face the unexpected from a position of strength. BIG IDEAL Democratizing Insurance TAGLINE Make Tomorrow Better. BRAND VOICE Straightforward Approachable Confident Comfortable STAKEHOLDERS Agency Owners Agents Consumers Investment Community BRAND ATTRIBUTES Easy Accessible Optimistic Dependable BUSINESSES Captive AgentsDirect-to-Consumer General Agents BRAND NARRATIVE You wake up every morning with your family on your mind. You fight through rivers of traffic and spend all day, every day, on the job so that they can have a better life than the one you’ve had. It’s important to you to provide a legacy of strong financial security. Buying insurance seems like it could be a critical piece of building that legacy, but it’s such an intimidating process. All the different options and the complexity and jargon of the policies can be overwhelming if you’re not used to it. Not to mention, it’s expensive. For the ones who keep America going everyday, running our factories, keeping us safe, and caring for our families, it feels like insurance companies just don’t have people like you in mind. All working families want is a simple policy that fits their needs at a reasonable price. It shouldn’t be so hard to find one. Globe Life understands what you’re going through. We level the playing field in the insurance industry. We know that working families have the same hopes, dreams, and aspirations as everyone else, but go about achieving them in their own ways. Your insurance should reflect that. We provide insurance solutions centered around the way you live. They’re easy to understand and priced to accommodate your budget. By offering quality, affordable insurance policies, Globe Life allows working families to face the unexpected from a position of strength. And having that protection makes all the difference in the world. If the unforeseen strikes, you don’t have to worry about your bills getting paid or the lights staying on. You won’t have to make tradeoffs on essentials like your children’s school supplies or the food on your table. Our policies provide a boost to keep you afloat in times of crisis. Knowing you’re protected, you can focus on what’s most important: building on the progress you’ve made through the years so your family can create an even better future moving forward. That’s a legacy you can be proud of. 1 2 3 REASONS TO BELIEVE • Policies are simple, straightforward • Explained in everyday language with no jargon • Policies that anyone can afford • People available by phone or by internet chat to answer any questions 24/7 • For over a century, we’ve been securing the financial futures of working class families helping them to thrive and grow • High quality coverage you can count on • Policies that cover a wide variety of needs
- 32. 33 New visual identitysystem
- 33. 34 Current state Corporate brand Businessbrands Step 1 (Year 1-2) Globe Life | Liberty National Globe Life | United American Globe Life | Family Heritage Globe Life Globe Life | American Income Life Globe Life Step 2 (Year 3-4) Globe Life Globe Life Globe Life | American Income Life Globe Life Globe Life Globe Life Step 3 (Year 5+) Globe Life Globe Life Globe Life Globe Life Globe Life Globe Life Transition strategy
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- 35. 36 Transition underway Corporate brandlaunched Brand transitions in progress
- 36. 37 Key considerations • Thefuture strategy for the merged company • Brand architecture for the merged business • Brand transition plan • Whether the acquiring company’s corporate name should be changed • Whether the acquired brand will be retained in some capacity or not • Financial impact of different brand strategy & architecture options • The operational & cost implications of changing names • How the product portfolios will be aligned & branded • How products should be named
- 37. 38 Future Vision Brand ArchitectureIntegration Strategy What is the future strategy for the company and what are the implications for brand architecture? How similar is the business of the acquired company to that of the core business? How much customer cross- over is there? What role will the acquired business play in the future strategy of the company? In a post-COVID-19 world, will an increased desire for trust impact the equity and value of each brand? How well is each brand equipped to ride the tide of future trends? Is this a one-off transaction, or will there be more? How do the brand perceptions and attributes of the acquired brand and the corporate masterbrand compare? How much equity does each brand have overall? How much value is each creating? What are the strengths and weaknesses of each brand overall, by business, by audience & by geography? How does each brand’s performance benchmark against competitors? Where does each have differentiation and a competitive advantage What are the implications for evolution of the corporate brand positioning & narrative? Is there a case for changing the corporate name following the acquisition(s)? Which is the best option for the architecture model? A house of brands strategy? Migrating the acquired brand to the corporate brand? Acquired brand endorsed by corporate brand? How are different brand architecture options likely to impact on revenues, profits and enterprise value? What is the downside and upside of eliminating the acquired brand? What are the implications for different parts of the business? E.g. US vs. international? Different audiences? Different product / service segments? How do we bring the product portfolios together from a brand perspective? What organizing principle should we be using to group our products & services? What are the implications for product rationalization / rebranding? What are the implications for naming & nomenclature? What should the timing be for the new brand architecture roll-out? Are any interim stages required? What are the implications for brand visual identity? How should we be talking about the benefits of the merged business to investors and analysts, to customers, to employees of each company? Questions to tackle 38
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