Corporate Syntheses: Consumers' Role in Mergers and Acquisitions

The classical finance-based view of Mergers and Acquisitions (M&As) pays attention to financial factors. But, “Who’s thinking about customers and critically-the brands? At the moment no one (Basu, 2002).” This paper investigates consumers’ reactions to M&As and suggests two key factors: degree to which the two corporate images match, and naming strategy. The more (less) the two corporate images match, the more consumers prefer companies to operate under a combined (separate) name. Following the “losses loom larger than gains” rule, consumers are more likely to support the separate naming strategy in the low matching case than the combined naming strategy in the high matching case. Managers should first understand consumers’ perceptions of the “matching” between the two corporate images and choose the naming strategy accordingly.

Citation:

Eleni-Zoi Papavasileiou (2009) ,"Corporate Syntheses: Consumers' Role in Mergers and Acquisitions", in NA - Advances in Consumer Research Volume 36, eds. Ann L. McGill and Sharon Shavitt, Duluth, MN : Association for Consumer Research, Pages: 1054-1055.