In the last 12 months, six of BDB’s clients and several of the publishers we work with have been involved in international acquisition activity. They’re typical of many companies, especially in the construction, food and packaging sectors. Grant Thornton recently reported an increase of nearly 100% in UK mergers and acquisitions in Q1 2011 compared to Q4 2010. Deloitte believes the top 10 publicly quoted US food and drink companies are looking to invest around $30 billion to tap into emerging markets or gain a foothold in niche areas. And Euromonitor anticipates a marked upswing in M&A activity in food ingredients over the course of 2011.
The interesting development recently has been the sheer scale and ambition of some acquisitions. DuPont shelled out over $6 billion on Danisco late last year. When Ardagh bought Impress for €1.7 billion, it not only entered a completely new market, but acquired a company with revenues 50% higher than its own. Sealed Air is stepping outside packaging and entering the $40 billion industrial cleaning and sanitisation market with its acquisition of Diversey, and last week saw prolific rumours of a £38 billion acquisition of Unilever by P&G. The stakes are high.
And that message rings clear when we hear reports like that of ACS, the Spanish construction contractor. It launched a hostile takeover bid for German Hochtief, but has so far managed to raise its holding to only 43% and suffered a 30% drop in Q1 net profits.
So what implications do these mega-mergers have on branding, PR and communications? They necessitate a thorough appraisal of affected audiences (internally and externally) and the development of a multi-channel strategy that addresses each of them distinctly. In some cases, this might mean fundamental changes to communications teams: too often M&A activity is dominated by investor relations while resources for trade and internal comms fall by the wayside. This is more than a missed opportunity; it can be costly and extremely damaging to the corporate brand.
If your company is involved in international M&A activity, there are five things to bear in mind when it comes to trade communications:
- Remember all your audiences and formulate an integrated strategy, with adequate resourcing, for all of them. While investor relations are undoubtedly important, they are not, and must not be, the be-all and end-all of your communications
- Don’t underestimate the scale and complexity of the work needed, or the time and resources you’ll require
- Tread carefully when it comes to local involvement. There’s a fine line between adequate consultation, which is of course desirable, and unmanageable conflicting opinions that make decisions and progress incredibly difficult
- Consult an international communications expert, even if you have a large in-house team. An experienced third party can identify and fill the gaps you may not even know you have. It can provide the framework and context at a strategic level, and/or carry out the detailed implementation across territories, businesses and communications tools
- Just as you evaluate the success of your day-to-day communications, make sure you establish a suitable methodology and objectives for the integration period before you start. Measure regularly and rigorously, and adapt as necessary.
To know more about BDB’s expertise in corporate and product or service branding, PR and communications, from conception to roll-out and implementation, just get in touch. zoe@bdb.co.uk
