Yet despite the discipline applied to these processes, many transactions fail to deliver the value that was anticipated when the deal was conceived. The reasons are varied. In some cases, the strategic rationale was flawed from the beginning. In others, expected synergies prove more difficult to capture than expected. Many transactions encounter challenges during integration, when two organisations with different cultures, operating models and ways of working are expected to become one.

Research from Boston Consulting Group and McKinsey has repeatedly highlighted that capturing value from M&A is significantly more difficult than identifying the strategic rationale for a transaction. The challenge is often not in explaining why two companies should fit together on paper, but in ensuring that the underlying sources of value survive the transition and are translated into future performance.

This creates an interesting paradox. M&A is one of the most analytical processes in business, yet some of the factors that determine whether value endures are among the hardest to evaluate before the transaction takes place.

Financial performance, market opportunity and operational capability can be analysed with increasing sophistication. However, understanding why a company wins in its market, why customers choose it and which elements of its advantage are likely to survive a change in ownership requires a different perspective.

  • What makes customers choose one company over another?
  • How strong is the position a company actually holds in its market?
  • How much of its success is based on structural advantages, and how much depends on reputation, trust, relationships or individual people?
  • Which parts of that value can be transferred, strengthened or rebuilt?

These questions are closely connected to brand. Not brand as a communications discipline, but brand as the relationship between a company and its market. It represents the accumulated expectations, associations and preferences that influence how customers perceive a company, how they make choices and how much confidence they place in its ability to deliver. This matters because companies are acquired because buyers believe they can create future value from what has been built, not simply for what they have achieved historically. Understanding future value, requires understanding more than performance alone.

Understanding what is actually being acquired

Every acquisition begins with a hypothesis about the future. The buyer believes that the target company represents an opportunity: access to a new market, stronger capabilities, differentiated technology, valuable customer relationships, specialist expertise or a platform for future growth.

McKinsey has identified several different acquisition strategies, including improving the performance of a target company, accelerating market access, acquiring capabilities, entering transformational combinations and consolidating fragmented industries. These different approaches create value in different ways, which means the role of brand will also vary depending on the logic behind the transaction.

In some acquisitions, brand may be central to the investment thesis. When a company is buying market access, customer relationships or a meaningfully differentiated position, understanding brand is part of understanding the asset itself.

In others, brand may be less relevant at the point of acquisition. A company acquiring technology, specialist expertise or operational scale may not initially be focused on market perception. However, even in these cases, brand can become important when considering integration, employee alignment and the ability to realise the expected value.

This distinction is important because brand should not be positioned as a replacement for commercial diligence. Commercial diligence plays a critical role in assessing market attractiveness, competitive dynamics, customer behaviour and growth potential. The question is whether understanding commercial attractiveness is the same as understanding the reasons behind that attractiveness.

  • A company may have strong customer retention, but what creates that retention? Is it genuine preference, differentiated capabilities, trusted relationships, switching barriers or simply a lack of better alternatives?
  • A company may have a strong market position, but is that position embedded in customer perception or primarily based on historical momentum?
  • A company may have an impressive growth trajectory, but are the reasons behind that growth transferable under new ownership?

These distinctions matter because different sources of value have different levels of durability.

  • A company whose customers stay because they believe in its expertise and reputation represents a different acquisition opportunity from one where customers stay because contracts are difficult to change.
  • A company whose market position is based on meaningful differentiation represents a different opportunity from one benefiting primarily from temporary market conditions.

Commercial diligence can help establish whether the opportunity exists. Understanding brand helps explain why the opportunity exists and whether it is likely to endure.

Seeing value where others see decline

The role of brand in M&A is not only about identifying risks. It is also about recognising opportunities. Some of the most interesting acquisitions are not based on buying companies with fully realised market positions. They are based on recognising brand and market potential that others have overlooked — or where the existing owner has not had the capabilities, scale or strategic focus to fully convert that potential into value.

Experienced acquirers sometimes identify companies where the underlying assets remain valuable, but where the connection between those assets and the market has weakened. The company may have strong capabilities, deep customer relationships, technical expertise, category heritage or a recognised name, but lack the commercial capabilities, market access or strategic clarity required to translate those strengths into a stronger market position.

In these situations, the buyer is not simply acquiring existing brand equity. The buyer is acquiring the opportunity to rebuild, reposition or unlock value that already exists but is not being fully realised.

This distinction matters.

  • A declining brand and an undervalued brand may appear similar from the outside, but they represent very different acquisition opportunities. A declining brand may reflect deeper structural issues: declining relevance, weakening capabilities, changing customer preferences or a failure to adapt to market developments.
  • An undervalued brand may represent something different: a company where the underlying capability remains strong, but where the market position does not reflect what the business is capable of delivering.

This is where the capabilities of the acquirer become part of the value equation. A company with strong strategic, commercial and brand capabilities may see opportunities that others miss. It may recognise that the target’s current position reflects underinvestment, unclear positioning or an inability to translate capability into customer value.

The buyer’s opportunity is therefore not only to preserve existing value, but to create new value. This is particularly relevant in acquisitions where the acquirer believes it can strengthen the target’s market position. The question is not simply whether the company has a strong brand today. The question is whether there is a credible path to a stronger position tomorrow.

The human dimension of acquisition decisions

M&A processes are often presented as highly rational exercises. In many respects, they are. They involve detailed analysis, structured evaluation and extensive governance. However, they are also human decision-making processes.

Every acquisition requires leaders to make judgements about an uncertain future. They assess available information and form a view that a particular combination of businesses, capabilities or markets will create more value together than separately. That judgement is unavoidable. Strategic decisions require conviction. The challenge is that conviction can influence how information is interpreted.

Once an acquisition thesis begins to form, organisations naturally begin to search for evidence that supports it. This does not mean that subsequent analysis is meaningless or that leaders consciously ignore contradictory information. Rather, it reflects a broader characteristic of human decision-making: the assumptions that shape our view of an opportunity also influence how we evaluate the evidence around it.

Research into behavioural factors in M&A has shown that cognitive biases, including managerial overconfidence, can influence acquisition decisions and outcomes. More recent research has continued to explore how executive confidence, expectations about future value creation and investor sentiment can influence acquisition behaviour. The implication is not that leaders should remove ambition or strategic judgement from M&A. Ambition is often what creates transformational opportunities.

The implication is that acquisition processes need mechanisms that challenge assumptions, not only processes that validate them. Understanding brand can be part of that challenge because it provides an external perspective on value. It asks questions that are easy to overlook when an acquisition thesis becomes compelling:

  • Why do customers choose this company?
  • What makes them trust it?
  • Which parts of the company’s value proposition are meaningfully different?
  • What would customers miss if the company disappeared?

These questions help reveal whether the value being acquired is based on something durable.

The challenge on the selling side

The same issue exists from the perspective of the seller. Preparing a company for sale is a natural part of the transaction process. Management teams should clarify their strategy, improve reporting, strengthen operations and communicate the opportunity clearly. A company that has genuinely improved its market position should be able to demonstrate that value.

However, every transaction also creates incentives to maximise perceived attractiveness. The informal phrase “pimping the bride” captures this tension. It is not necessarily a criticism of sellers or an accusation of poor intent. It reflects the structural reality of transactions: sellers are expected to maximise value, while buyers are expected to identify opportunities.

The challenge is distinguishing between improving the company and improving the story about the company.

  • A stronger narrative does not necessarily mean a stronger market position.
  • A clearly articulated value proposition does not necessarily mean customers perceive the company in that way.
  • A successful growth story does not necessarily mean the underlying drivers of growth will remain after ownership changes.

This is why external market understanding is important. A company’s internal view of its own value is only one perspective. The market’s view is ultimately the one that determines whether the value survives. A thorough assessment should therefore investigate not only what the company claims to represent, but what customers actually value, why they choose the company and how resilient that preference is.

Brand as an integration mechanism

The relevance of brand in M&A does not end when the transaction closes. Even where brand is not central to the original investment thesis, it can play an important role in integration by helping employees understand what is changing, what is being preserved and what the combined organisation is trying to become.

This is often underestimated because M&A discussions naturally focus on organisations as legal and financial entities. Employees experience acquisitions differently. They do not experience the transaction as the transfer of assets between shareholders. They experience it as a change to the organisation they chose to join.

An employee who joined a company because of its reputation, expertise, purpose or culture did not necessarily choose to work for the acquiring company. The commitment that existed before the transaction cannot simply be transferred through an organisational announcement. This is one reason why cultural integration remains such a significant challenge in M&A. Understanding how work gets done, how decisions are made, what behaviours are rewarded and what customers value requires attention long before integration plans are finalised.

Brand has an important role in this process because it provides a framework for meaning. It helps answer questions employees naturally ask after a transaction:

  • What does this mean for me?
  • What does this mean for who we are?
  • What should we continue to be proud of?
  • What role do we play in the future organisation?

In this context, brand becomes an internal alignment mechanism.

The strongest integrations do not simply ask how two organisations can be combined. They consider how people from different backgrounds can develop a shared understanding of what the new organisation represents and why their contribution matters.

Brand should run on the M&A clock

This leads to our hypothesis: brand should run on the M&A clock.

Brand considerations should not begin when the transaction is complete and the communication plan is being developed. They should begin when the acquisition thesis is being formed.

  • Before the transaction, brand can help determine what is actually being acquired. It can provide insight into customer preference, reputation, differentiation and the sources of competitive advantage.
  • During diligence, it can help distinguish between performance and the reasons behind performance, helping leaders understand which elements of value are durable, transferable and capable of being strengthened.
  • Between signing and closing, it can inform decisions about positioning, architecture, stakeholder expectations and integration priorities.
  • After closing, it can help turn strategic intent into a credible proposition for customers, employees and the market.

This approach does not suggest that brand is more important than financial discipline, operational capability or integration management. Successful M&A depends on these disciplines working together. The argument is that companies need a more complete understanding of the value they are buying, the value they can create and the conditions required for that value to endure.

Brand plays a role in all three.

  • It helps identify value by explaining why a company wins today.
  • It helps create value by revealing where market position can be strengthened tomorrow.
  • It helps realise value by ensuring that customers and employees continue to believe in what the organisation represents after ownership changes.

An acquisition changes ownership at a defined point in time, but the value of the acquired company is not transferred automatically with the legal transaction. It has to be maintained, developed and, in many cases, transformed.

The question is therefore not whether brand should become part of M&A. Brand already influences many of the outcomes that determine whether a transaction succeeds.

The more important question is whether organisations are examining brand early enough, and with sufficient discipline, to understand the nature of the value they are buying, the opportunities they may be overlooking and the conditions required for that value to endure.

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