The role of brand equity in brand acquisitions : Differences between cross-border and domestic acquisitions

Abstract

For a long time, mergers and acquisitions have been a growing trend as they are one of the easiest and fastest strategies to i.e. increase market share, enter new markets or acquire brands. However, acquisitions are risky, and many have been unsuccessful. Therefore, the evaluation of the target becomes highly important. However, this evaluation is not easy and especially the evaluation of intangible assets, such as brand equity, has its own difficulties. Thus, this thesis will try to provide answers on what needs to be taken into consideration, especially what components of brand equity, when acquiring brands. Also, this thesis will try to investigate, if there are differences between cross-border and domestic brand acquisitions, when it comes to brand equity evaluation.

This study is a qualitative research conducted with six companies in the Nordic region. Each of the companies had had either cross-border or domestic acquisitions in the past years. The study was completed using semi-structured interviews followed by a thematic data analysis.

The main finding from the evaluation of brand equity between cross-border and domestic acquisitions is that the evaluation of brand equity is important in brand acquisitions, and thorough evaluation should be conducted. Cross-border acquirers in this thesis evaluated more components of brand equity than the domestic acquirers. However, interestingly not all acquirers, whether it was domestic or cross-border, had a thorough evaluation process in place for brand acquisitions. This suggests that there needs to be more research in this area in order to find a proper evaluation method for brand equity in brand acquisitions.