Brand attitude change and acquisition attitude : an experimental study of U.S. consumers in an M&A setting

Abstract

Previous research on mergers and acquisitions (M&As) has mainly focused on financial and strategic outcomes at the expense of marketing dimensions. Although consumers play a critical role in the success of M&As, their perceptions and responses to such activities have seldom been addressed, and the impact of M&As on consumer attitude towards the brands has been overlooked. This current research aims at providing managers better and useful insight concerning how different well-known factors influence consumers’ reactions to M&As, and how to implement an M&A process more successfully based on consumers’ perspectives. Specifically, this study examines how competence complementarity between two outdoor sports and recreation brands involved in an M&A, communicated acquisition motive, target brand ownership status, and naming strategy will influence consumers’ attitudinal responses. More detailed, attitudinal responses towards the bidder brand, target brand, and the acquisition. Two experiments with between-subjects design were conducted to test the developed hypotheses in the study. A total sample of 283 U.S. consumers participated, where the aim was to gain a better understanding of their reactions. The findings contribute to M&A and attitude literature by taking into account consumers’ evaluations. Results demonstrate that (1) competence complementarity, communicated acquisition motive, and target brand ownership status have significant effect on attitude change, and that acquisition attitude mediates these variables, and (2) companies’ attempts to involve consumers in an M&A process create more negative evaluations. The results indicate that consumers appreciate honesty from companies with respect to acquisition motive. Thus, it is important for managers to acknowledge customer related issues in M&A decisions.