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IJBM
26,5 Rebranding in the banking
industry following mergers and
acquisitions
328
Mary Lambkin
Smurfit School of Business, University College Dublin, Dublin, Ireland, and
Received November 2007
Revised March 2008 Laurent Muzellec
Accepted May 2008
Dublin City University, Dublin, Ireland

International Journal of Bank
Marketing
Vol. 26 No. 5, 2008
pp. 328-352
q Emerald Group Publishing Limited
0265-2323
DOI 10.1108/02652320810894398
Abstract
Purpose – This paper aims to examine how international banking groups manage their branding in
the context of successive mergers and acquisitions. It seeks to review of a number of case histories in
order to show that banking companies tend to evolve a multi-tiered system for absorbing and
rebranding acquisitions and it also seeks to present a general framework to guide future research and
practice.
Design/methodology/approach – The banking industry has been undergoing major consolidation
in recent years, with a number of global players emerging through successive mergers and
acquisitions. These transactions vary in scale and location, from major mergers of large, equal-sized
international entities to acquisitions of smaller, local businesses in various countries all around the
world. This paper brings together the literature on mergers and acquisitions, which mostly comes
from economics and finance, with the marketing literature on branding and rebranding, to create a
framework to help us to understand the management challenge of rebranding bank brands in this
context. Citigroup and Crédit Agricole are used as a preliminary test of this framework.
Findings – This analysis suggests that the branding problem varies according to the size and
international status of the acquisitive bank. Very large banks with international brands such as
Citigroup tend to follow a branded house strategy where they impose their master brand on all
acquisitions resulting in a further enhancement of scale and brand strength. However, this general
strategy conceals a more complex, multi-tiered approach with different types and sizes of acquisitions
being rebranded in different ways. Regional players such as Crédit Agricole tend to opt for a house of
brands strategy where their acquired companies retain their own name and brand franchise in local
markets.
Research limitations/implications – The framework presented here is entirely new and requires
further testing. The evidence supplied here is interesting but preliminary and requires further
validation.
Practical implications – Most banking companies nowadays become involved in mergers and
acquisitions at some stage, and face the task of realigning their brands in the aftermath of these
transactions. This paper provides a systematic framework backed up by empirical evidence to help
them to make these decisions.
Originality/value – The paper addresses a critically important strategic issue that has not been
addressed in any detail in the marketing literature. The paper provides preliminary research evidence
and a framework to suggest hypotheses for further research.
Keywords Banking, Brands, Acquisitions and mergers, Consolidation
Paper type Case study
All logos reproduced with permission from Crédit Agricole Group and Citigroup.
Introduction Rebranding
The banking industry worldwide has been consolidating at a dramatic rate over the following M&As
past 30 years, and this trend is ongoing. Over the two decades 1984-2003, the structure
of the US banking industry underwent an unprecedented transformation, marked by a
substantial decline in the number of commercial banks and savings institutions and by
a growing concentration of industry assets among a few dozen extremely large
financial institutions (Berger et al., 1999; Jones and Critchfield, 2005). At year-end 1984, 329
there were 15,084 banking and thrift organisations. By 2005, that number had fallen to
6,500 – a decline of 57 per cent (Jones and Critchfield, 2005; Janicki and Prescott, 2006).
In 2005, the ten largest banks held almost 60 per cent of the banking industry’s assets
and the top three held almost a quarter of all deposits.
A similar trend has occurred in Europe, but at a slightly less dramatic rate (Walkner
and Raes, 2006). Between 1997 and 2003, the number of credit institutions fell by
almost 35 per cent in Germany, by more than 25 per cent in France and The
Netherlands, and by 20 per cent in the UK. For the EU 15 as a whole, the number
declined from 9,624 to 7,444, a reduction of more than 22 per cent. The number had
fallen further by 2005, to 6,308, and that continued into 2006 (PricewaterhouseCoopers,
2007).
Developments in the global banking industry in the last two years have been
dominated by the sub-prime crisis and the liquidity problems that have followed from
it. These problems have made financial institutions cautious about voluntary mergers
and acquisitions; this year’s focus is more likely to be more on minimising the impact
of the US sub-prime crisis on existing operations, as evidenced by the large
write-downs announced by most of the world’s major banks. Notable exceptions have
been the mergers and acquisitions brought about as a result of financial distress such
as the acquisition of Bear Sterns by JPMorgan in the USA, and that of SachsenLB by
Landesbank Baden-Württemberg (LBBW) in Germany. Informed commentators are
suggesting, however, that further consolidation leading to increased scale is likely to be
the best long-term solution to problems such as those caused by the sub-prime crisis, so
the trend is probably likely to continue as soon as the immediate problems have been
overcome (Boston Consulting Group, 2008).
Most of the decline in the number of organisations was due to mergers and
acquisitions (Jones and Critchfield, 2005). In the USA, mergers and acquisitions were
the single largest contributor to the net decline in banking organisations in every year
but one between 1984 and 2003. During the entire period, 8,122 individual bank and
thrift organisations disappeared through mergers and holding company purchases. A
large majority of these were domestic (86 percent), split approximately half-and-half
between horizontal (same product category-banks acquiring other banks) and
diversifying (into new product areas such as insurance or stock-broking) (Berger et al.,
1999).
The number of M&As was lower in Europe but still very substantial; between 1996
and 2005, European banks made 816 acquisitions for a total value of e682 billion
(PricewaterhouseCoopers, 2006). In past years, M&A transactions in the EU banking
sector have been predominantly domestic; between 1993 and 2003, the number of
mergers and acquisitions involving domestic credit institutions represented about 80
per cent of total consolidation activity (Walkner and Raes, 2005). Cross-border
transactions during those years mainly concerned intermediaries in asset management
IJBM and investment banking, whilst more recently it has involved retail-oriented
26,5 institutions with well-developed distribution networks. European cross-border M&A
activity picked up in the second half of 2005 and early 2006 and continues to grow in
terms of deal value (Walkner and Raes, 2006). Cross-border deals are currently
accounting for about two thirds of transactions (PricewaterhouseCoopers, 2007).
This wave of consolidation has been attributed to many factors, both macro and
330 micro (Berger et al., 1999; Jones and Critchfield, 2005; Walkner and Raes, 2005). At the
macroeconomic level, consolidation has been influenced by factors such as the
increasing globalisation of the international financial system, the liberalisation of
capital movements across borders and financial deregulation within countries,
technological advances particularly in transaction processing, and greater competition.
From a microeconomic perspective, a bank’s decision to consolidate – to merge with or
acquire another firm – reflects management strategy for maximising or preserving
firm value in the face of increased competitive pressure (Jones and Critchfield, 2005).
For example, a merger strategy can be based on value-maximising motives, such as
exploiting economies of scale and scope, or increasing profits through geographic and
product diversification. In a survey of bank management, value-maximising motives
were cited as the principal reason to undertake a merger (Group of Ten, 2001).
All in all, it is believed that the microeconomic factors are largely responsible for the
consolidation trend (Jones and Critchfield, 2005; Basu, 2006). One microeconomic
variable that is of special interest in this paper is that of branding, in particular the fact
that every single merger or acquisition involves a branding or, more typically, a
rebranding decision, which can possibly affect the synergies achieved and the value
created by the combination of firms or businesses. Typically, the acquirer pays a large
premium for the goodwill or brand equity of the acquired firm and the challenge then is
not only to preserve the existing equity under the new ownership but, ideally, to
expand and enhance it.
Whether this will occur in practice is a very open question. There is a large body of
evidence in the finance literature showing that mergers and acquisitions do not tend to
produce the performance gains that were hoped for. In fact, the evidence is very
consistent in showing that the main, and often the only, beneficiaries of acquisition
transactions are the sellers who make a one-off gain from the purchase price premium
paid to acquire their firm (Berger et al., 1999; Bruner, 2004; Moeller et al., 2005; Kaplan,
2006). Furthermore, if any gains are made, it tends to be on the cost efficiency side, with
no evidence of any increases in market power. This suggests that the anticipated
synergies between the brands of the acquirer and the acquired company are rarely
realised. This paper is concerned with examining why this may be.
Following a merger of two firms, a decision has to be taken as to what name to
adopt to represent the combined entity. Similarly, acquirers of companies have to
decide how to integrate their acquisitions into the parent group – whether to leave
their original names to stand, whether to rename them under the new owner’s name, or
whether to find some other solution (joint names or an entirely new name). There are
also many issues involved in communicating any change of name and in winning over
stakeholders so as to preserve the brand equity embodied in the acquired brand and its
underlying business.
It hardly needs to be said that rebranding is a very costly exercise[1], as well as
carrying a high level of reputation risk, so it seems obvious that these decisions should
be informed by strong theory and research. The objective of this paper is to bring Rebranding
together the academic literature on rebranding and mergers and acquisitions (M&A) in following M&As
order to identify the branding options available to firms facing this challenge.
Based on the literature and industry review, we propose a conceptual framework
which puts branding at the heart of the M&A decision making process. An initial
examination of our propositions is then carried out in the context of two cases. Finally,
this analysis is brought to a conclusion by identifying guidelines for managers faced 331
with making rebranding decisions.
A review of the available evidence suggests that rebranding is usually given low
priority in merger negotiations and is typically decided on the basis of simple
expediency after the deal is concluded, to bring some order to the untidy collections of
names and entities that are inherited as a result of combining two firms and their
collective products and markets (Ettenson and Knowles, 2006). Ideally, however,
rebranding should be driven by marketing considerations, to use the opportunity to
signal a new strategic focus to the company’s stakeholders and to extract synergies
from the brand equities of the merged entities.
The most important question, of course, is whether the rebranding choices that
companies make have a positive or negative impact on corporate performance.
Research evidence from the mergers and acquisitions literature, mainly carried out by
financial economists, measures performance in terms of cost efficiency, profit
efficiency (revenue enhancement), and/or shareholder value. It does not typically
consider branding issues, which are the domain of marketing academics. It is hoped
that this paper will add some value by bringing a marketing perspective to the
discussion.

Literature review: rebranding in a M&A context

Defining branding and rebranding
There are numerous definitions of brands and branding in the marketing literature, but
all converge around the idea that a brand name is a unique name that identifies a
product and differentiates it from competitors. In its dictionary of marketing terms, the
American Marketing Association defines a brand as “a name, term, design, symbol, or
any other feature that identifies one seller’s good or service as distinct from those of
other sellers”[2]. Consequently, it seems appropriate to define rebranding as the
creation of a new name, term, symbol, design or a combination of them for an
established brand with the intention of developing a new, differentiated position in the
mind of stakeholders and competitors (Muzellec and Lambkin, 2006).

Rebranding in the context of brand hierarchy

Rebranding can occur at three distinct levels in an organisation:
(1) corporate;
(2) strategic business unit; and
(3) product level.

This is illustrated diagrammatically in Figure 1. Corporate rebranding refers to the

renaming of a whole corporate entity, often signifying a major strategic change or
repositioning. Some well-known examples in the financial services sector are the Hong
Kong and Shanghai Bank becoming HSBC; United Bank Suisse (UBS) becoming UBS
IJBM
26,5

332

Figure 1.
Rebranding in the context
of brand hierarchy

Warburg and UBS Paine Webber at various times and, latterly, going back to the
simpler UBS; Barings becoming ING Barings; and Abbey National shortening its name
to Abbey. Each of these moves reflects a different strategy emanating from a particular
set of circumstances, the nature of which we wish to explore in this paper.
Rebranding of strategic business units within large corporations is the second
category. This refers to a situation where a subsidiary or division within a larger
corporation is given a unique name to create a distinct identity separate from the
parent. Citigroup’s decision to use the Smith Barney brand for its private client
business is a case in point. The distinctive new names given to their internet banking
subsidiaries – such as Egg by Prudential plc (since sold to Citigroup), and Cahoot by
Abbey – also illustrate this category.
Rebranding of individual products also occurs, sometimes as a tactical move driven
by the desire to brand globally, to derive economies of scale in marketing
communications and to benefit from spillovers in brand awareness across geographic
borders. For example, Halifax-Bank of Scotland Ireland was rebranded as Halifax, a
move which allowed the Irish brand to benefit from Halifax’s UK communication
campaign running on UK-based networks (BBC, Sky, ITV, Channel 4), which are
widely watched by Irish consumers. A variation on this idea is when corporations
choose to sell third-party products under the supplier company’s name, such as Bank
of Ireland selling Prudential products, or Barclays selling Norwich Union insurance,
etc. Affinity brands are a variation on this category, with banks providing products
under retailers’ names such as Citigroup supplying Sears credit cards, and co-branding
also occurs such as Citigroup’s joint venture with Nikko Beans online bank in Japan
and ZAO Bank in Russia.

A branded house or a house of brands?

A further development on the concept of brand architecture has been to distinguish
between a “branded house” and a “house of brands” (Aaker and Joachimstaler, 2000). A
branded house refers to a company with a single corporate brand name applied to all
its businesses and products, while a house of brands refers to a holding company Rebranding
structure with a corporate name and a whole collection of separate names for business following M&As
units and products. Companies do not tend to conform exactly to one or other of these
categories; it is more a case of displaying a general tendency in one or other direction
while allowing for some exceptional items (Laforet and Saunders, 1999, 2005). For
example, HSBC, the global financial services company, has shown a clear preference
for a single brand name (a branded house) for all its acquisitions around the world, but 333
chose to keep the name of the internet bank, First Direct, having taken over and
renamed its parent, the Midland Bank in the UK. The only visible sign of the
acquisition was the appearance of the HSBC logo alongside the First Direct name.
Banks and other companies in financial services tend to conform to the branded
house category, with their corporate name being applied throughout their portfolio of
businesses and products. In this they are consistent with the broader category of
services businesses, which tend to have narrow product lines that draw much of their
brand equity from their corporate reputation. These are in direct contrast with
consumer products companies, which typically have long lines of individual product
brands with the corporate parent’s name being downplayed or even concealed (Laforet
and Saunders, 1999, 2005).
The reason for these different branding strategies is not always obvious but it
seems, in general, that the brand equity of services draws very much from the
corporate reputation (de Chernatony and Dall’Olmo Riley, 1999; de Ruyter and Wetzels,
2000). In contrast, many consumer products have such strong brand equity in their
own right that it virtually eclipses that of the parent company.

Brand architecture in the context of mergers and acquisitions

In the context of mergers and acquisitions, it can be helpful to think of changes and
additions in terms of how they impact different parts of the brand architecture.
Changes or movements can occur in an upward or downward direction within single
product lines, or they can be applied across product lines or markets. A change in the
corporate brand designed to strengthen its equity can be carried down through the
hierarchy to the lowest level and smallest product. For example, HSBC gradually
rebrands all its subsidiaries to create synergies between the local expertise of the
acquired national brands (originally, Midland Bank in the UK, Republic National Bank
in Mexico, or more recently CCF in France) and the global status of HSBC. This
strategy gives strength to HSBC’s claims to be “The World’s Local Bank”. On the
contrary, the equity of a very strong product brand can be leveraged upwards to add
value at the corporate level. The example of Bank of Scotland, one of the largest banks
in the UK, renaming itself Halifax Bank of Scotland (HBOS) following its acquisition of
the building society is a case in point. HBOS has recently rebranded its Irish retail
business as Halifax on the grounds that that brand has a very strong reputation in
retail banking.
Viewed across product lines and geographic markets, the question is whether
brands can be stretched across product categories or markets or whether they have to
remain within defined boundaries. For example, can a bank brand be applied to
insurance or securities or other products within its portfolio? Or can a brand that is
closely identified with one country or region be carried over successfully into other
countries?
IJBM Evidence shows that most European M&A is domestic, suggesting that banking
26,5 companies do not find it easy or do not believe that they can be successful across
jurisdictions (Walkner and Raes, 2005; PricewaterhouseCoopers, 2006).

Rebranding options
Mergers and acquisitions between any two firms create four options for rebranding, as
334 shown in Figure 2 (Basu, 2006). The four options are:
(1) one brand, usually that of the acquirer (Firm A);
(2) a joint brand, where the names of the acquirer and the acquired are combined
(A-B);
(3) a flexible brand, where both brands are kept and used selectively (A&B); and
(4) a new brand, where both previous brands are dropped in favour of an entirely
new one (C).

Acquisitions usually result in the elimination of the target firm’s corporate brand in
favour of the acquirer, i.e. a one brand strategy in favour of the dominant brand (Basu,
2006). In a study of 207 M&A deals in the USA, Ettenson and Knowles (2006) found
that the acquirer company name replaced that of the target company immediately in 40
per cent of cases. This strategy – which they called “backing the stronger horse” –
was by far the most prevalent approach. The opposite strategy, of keeping the status
quo, was the second most frequent, representing 24 per cent of the cases studied.
A flexible or mixed branding strategy (A&B) is sometimes an option where an
acquired firm has a strong franchise in one or more market segments and would do
better to continue in that way. Citigroup’s retention of Smith Barney for its private
client business is a case in point. HSBC also followed this approach in retaining the
Household name for that business in the USA. This category accounted for about 15
per cent of the cases studied by Ettenson and Knowles (2006).
Joint brands, where the names of acquirer and target were attached together (A-B),
was the next most frequent strategy, but accounted for a smaller proportion of the
sample, at 13 per cent. A joint brand is likely to result in the event of a merger of equals,
each of which enjoys a strong franchise among its own customers (Basu, 2006). It is

Figure 2.
Branding options
following
mergers/acquisitions
especially likely if each of the individual brands has evolved into a national icon whose Rebranding
elimination would have repercussions both internally and externally. The creation of following M&As
LloydsTSB following the acquisition of the Trustee Savings Bank (TSB) by Lloyds in
the UK is a case in point, as is the creation of PermanentTSB in Ireland following the
acquisition of the TSB Bank by the Irish Permanent Building Society.
Joint brands are also likely in the case of joint ventures, for example, where a large
international company partners with a local operator to enter the market. Citigroup’s 335
partnerships with Nikko Beans online bank in Japan and with ZAO Bank in Russia are
examples of this.
It is also quite common for this strategy to be used as a temporary measure for a
year or two, to manage the transition gradually. Morgan Stanley’s acquisition of
Discover Dean Witter in 1997 exemplifies a transitioning strategy. It first changed the
name of the combined organisations to Morgan Stanley Dean Witter and Co. Ten
months later the Discover name was dropped from the corporate name and, in April
2002, the transition was completed with the elimination of the Dean Witter name.
Morgan Stanley was back where it started but, presumably, the brand had absorbed
new equity from the Discover and Dean Witter brands and now participates in markets
new to it such as credit cards (Kumar and Blomqvist, 2004).
Similarly, UBS followed a transitioning strategy for some time after it acquired the UK
investment banks S.G. Warburg Group and Dillon Read, and the US wealth management
company PaineWebber. The temporary co-branding strategy resulted in UBSWarburg
and UBSPaineWebber. In summer 2003, UBS announced a move to a single brand
strategy and phased out the transitional names (Kumar and Blomqvist, 2004).
Finally, a new brand name (C) may be chosen for the merged group, although this is
a much less frequent occurrence – 8 per cent of Ettenson and Knowles’s sample. This
strategy tends to be a last resort, although it may be justified for several reasons.
Firstly, an ambitious company making successive acquisitions may end up with such a
clumsy collection of brands that it seems easier to rationalise them all under one name.
For example, two consecutive mergers took the insurance group Commercial Union
(CU) to Commercial and General Union (CGU) and then to Commercial and General
Norwich Union (CGNU). The latter name and acronym is obviously clumsy, difficult to
remember and fairly meaningless, so a new name, Aviva, was created. The challenge of
this type of rebranding is to reconcile two apparently contradictory notions, which are:
(1) that the new company is the synthesis of long established corporations; and
(2) that the merger represents a new departure.

The tagline used by Aviva on its website illustrates this attempt: “We are a brand new
company with 300 years of history”[3].

Rebranding parameters in the context of M&A

In the following sections, we identify key parameters which should be considered when
deciding on which rebranding strategy to adopt. The parameters considered are:
.
the relative size and strength of the merged companies;
.
the type of products or services offered;
.
the relatedness of markets and products; and
.
the geographic distance.
IJBM These parameters were chosen because they have a long history in the economics and
26,5 finance literature and there is a considerable body of evidence attesting to their
importance in mergers and acquisitions (Berger et al., 1999; Bruner, 2004; King et al.,
2004; Jones and Critchfield, 2005; Walkner and Raes, 2005; Kaplan, 2006).

Relative size and strength

336 Research evidence in the banking industry consistently shows that acquiring firms
tend to be much larger than targets. A number of studies have found that, in a
substantial proportion of M&As, a larger, more efficient institution tends to take over a
smaller, less efficient institution, presumably with the intention of spreading the
expertise of the more efficient organisation over additional resources. In the USA,
acquiring banks appear to be more cost efficient than target banks on average (Pilloff
and Santomero, 1997; Berger et al., 1999). Another analysis of shareholder value
creation in the USA shows that big bank acquirers – those doing deals at least 50 per
cent of their own asset size – beat smaller acquirers by almost 30 per cent (James et al.,
1997). They also beat the bank composite by about 15 per cent.
European studies have also found that large, profitable banks tend to be acquirers,
while small, unprofitable banks tend to be targets (Focarelli et al., 2002). For example,
in a recent study, Altunbas and Ibanez (2004) found that acquirers were seven times
larger than targets on average (measured in terms of total assets). The general picture
they observed in a sample of 262 bank M&A deals (207 domestic and 55 cross-border)
was that of large and generally more efficient banks taking over smaller, and relatively
less risky institutions with more diversified sources of income.
As expected, they also found that size differences play a major role in influencing
post-acquisition performance.
Studies by marketing academics have also shown that the relative size of acquirers
and targets is an important variable in predicting the pattern of redeployment of
marketing resources following M&As. In a study of 253 acquisitions in the
manufacturing sector in the USA, Capron and Hulland (1999) found that redeployment
of marketing resources tends to be asymmetrical, with a high proportion of
redeployment from acquirers to targets but very little in the opposite direction. They
also found a strong, negative correlation between the relative size of the target and the
degree of redeployment from the acquirer. In other words, the larger the target relative
to the acquirer, the less it had need of a transfer of marketing skills or resources from
the acquirer. The reason for this is probably that size is correlated with relative
strength, and this was borne out by a direct measurement of the relative strength of
marketing resources; the stronger the target, the less likelihood that it will receive a
transfer of resources from the acquirer.
Translating this into the context of rebranding, we can surmise that the likelihood
of rebranding the target firm with the brand name of the acquirer would also be
inversely correlated with relative size and strength. Thus, we would expect a transfer
of brand name from acquirer to target to be high for relatively small, weak targets and
low for relatively large, strong targets. We might state this formally as follows:
P1. The likelihood of rebranding of targets by acquirers is inversely correlated
with the relative size and marketing strength of the target. Small, weak
targets will tend to be rebranded while large, strong targets will not.
Type of product: retail versus wholesale Rebranding
The markets for retail services differ from those for wholesale and capital market following M&As
services in several respects, resulting in a far greater emphasis on branding in retail
than in wholesale banking. Firstly, retail bank customers show a very low propensity
to switch banks whether as a result of inertia or brand loyalty. Secondly, the
competitive landscape in retail banking is relatively diversified, with small banks and
securities firms competing with large financial institutions resulting in a greater level 337
of market segmentation (Cabral et al., 2002). Thirdly, the proximity of banks to
customers is still very important for retail banks even with the increasing use of, and
access to, electronic banking. Although business-to-business branding is becoming
more relevant (Mudambi, 2002), branding in consumer markets is still of far greater
importance. Customers can be emotionally involved with their brand (Fournier, 1998).
In a retail banking environment, they may belong to the second or third generation of
customers (Boraks, 2007). The bank may have assisted them in one of the most
important decision in anyone’s life – the purchase of a home, for example.
Customer-based brand equity occurs when the consumer is familiar with the brand and
holds some favourable, strong, and unique brand associations in memory (Keller,
1993). A rebranding involving a change of name could theoretically wipe away the
positive mental images that the brand usually stimulates (Muzellec, 2005). All of these
points would suggest that retail banks would benefit from retaining the status quo and
avoiding rebranding where possible.
In contrast, business banking is far more mobile, with customers following the best
deal available and being far less brand loyal. They are also well informed about
changes of ownership and realistic enough to accept such changes without any
repercussions as long as the terms of the deal are still acceptable. Thus, rebranding is
an easier option in wholesale banking than in retail.
Translating this into the context of rebranding, we might propose that acquirers
would be very likely to rebrand their targets if they have relatively stronger brands
than their targets in the wholesale banking sector. However, the converse is probable in
retail markets; here acquirers will tend to keep existing brands in order to preserve
existing customer relationships where those relationships are strong. They will only be
likely to rebrand if the target firm has a poor reputation or weak customer
relationships that might benefit from a change to the acquirer’s name.
Stated formally:
P2. There will be a higher incidence of rebranding from acquirer to target in
wholesale than in retail banking businesses.

Relatedness of markets and products

Merger studies generally measure the relatedness or similarity of the merging firms by
means of one of two categories:
(1) horizontal/vertical/conglomerate; or
(2) level of overlap or similarity between lines of business.

The majority of bank mergers are horizontal – that is, they are mergers of banks with
other banks, rather than of banks with other kinds of financial service businesses such
as insurance or stock broking (Berger et al., 1999). Even within the general category of
IJBM horizontal mergers, however, there can be a lot of variation among firms, in their
26,5 products, markets, resources, management style and performance. Economists
studying this topic look for similarities and differences among firms and try to see
whether they are systematically related to performance.
By now there is quite a large body of evidence that mergers among banks having
substantial elements of overlap or similarity in their products and geographical
338 coverage create value, while dissimilarities tend to destroy shareholder value. For
example, Altunbas and Ibanez (2004) examined the impact of pre-merger similarities
between acquirers and targets on post-merger performance. They found that acquirers
and targets were quite different in terms of their capital, credit risk, off-balance sheet
and liquidity positions. In other words, they had a low level of similarity. Broadly
speaking, their results supported the hypothesis that, strategically closer institutions
tend to improve performance to a greater extent than dissimilar institutions, although
results differ for domestic and cross-border mergers and across some of the strategic
variables.
Using a sample of 204 mergers completed over the period from 1977 to 1996,
Megginson et al. (2004), found that mergers that decrease focus (another word for
similarity) result in significant losses in shareholder wealth, operating performance
and firm value over the three years following merger completion. Mergers that either
preserve or increase focus result in marginal improvements in long-term performance.
These results are consistent with studies of the positive effect of corporate focus.
Studies outside of financial services have also found that diversifying M&As are
generally value-reducing, while increases in corporate focus are value-enhancing
(mentioned in Berger et al., 1999). Capron and Hulland (1999) found that high market
similarity is strongly related to marketing resource deployment. As the similarity of
the markets served by the two firms increases, redeployment also increases.
Translating this into the context of rebranding, we may surmise that the greater the
similarity between the businesses of the acquirer and the target, the more likely an
integration strategy will be pursued which would favour the possibility of operating
the enlarged business under a single brand name. This would suggest the likelihood of
rebranding, in particular the migration of the acquired brand to that of the acquirer.
For example, Barclays Group have gradually rebranded all of the Woolwich branches
which were selling the same types of products as its retail bank under the Barclays
name.
In contrast, where acquired businesses sell products that are dissimilar to those of
the acquirer, there is less of a reason to rebrand. A bank buying an insurance company,
for example, has less of an opportunity to extract positive synergies by rebranding
under the bank name and, therefore, is less likely to do so. For example, when Lloyds
acquired Scottish Widows and C&G, those companies were allowed to keep their brand
identities.
Stating these arguments as formal propositions, we may say the following:
P3. The higher the degree of similarity between markets, the more likely that the
acquirer will rebrand the target under its own name, and vice versa.

Geographic distance
According to the available evidence, cross-border mergers and acquisitions have not
been a major feature of the European banking sector. In terms of numbers, M&As
among domestic credit institutions represent about 80 per cent of the total number of Rebranding
deals in the EU in each year since 1992, and account for about 90 per cent of the total following M&As
deal value (Walkner and Raes, 2005). Some analysts have suggested that the rationale
for the large amount of domestic M&A compared to cross-border M&A derives from
the fact that domestic M&A increases market power while cross-border M&A does not.
Research evidence also shows that foreign banks tend to have low market shares,
and lower interest margins and lower profitability than domestic rivals (Claessens et al., 339
2001). This evidence would tend to discourage cross-border market entry, especially to
retail banking markets where consumers are disinclined to switch accounts. In the
limited number of cases of cross-border market entry, a majority of firms have chosen
acquisition of established local firms as their mode of entry rather than taking on the
cost and risk of direct entry (Walkner and Raes, 2005).
However, this can also be controversial because of national sensibilities about
transfer of ownership to foreigners. Such factors tend to argue for leaving the local
name so as to avoid drawing attention to the fact of foreign ownership. For example,
Danske Bank recently entered the Irish market by acquiring a local player called
National Irish Bank. The image of this bank had been tarnished because of an
investment product it offered that was deemed to be a tax avoidance scheme, and so a
debate arose as to whether it would be preferable to rebrand the acquired bank under
the Danske name. This had another disadvantage in that it drew attention to the fact
that the bank was now owned by foreigners, which could detract from its local
business. In the end, the National Irish Bank was rebranded as NIB with a new style
and identity supported by a heavy communications campaign. This solution has been
very successful in circumnavigating both image problems and NIB is performing very
well in the business banking market for its new owners.
Summarising these points yields the following propositions:
P4a. The stronger the national identity of the acquirer brand, the less likely it will
be to impose its name on a cross-border acquisition.
P4b. The stronger the national identity of the acquired brand, the less likely the
acquirer is to change it.

Methodology: preliminary test: the cases of Citigroup and Crédit Agricole

A case study approach was chosen because of the exploratory nature of the research
and of the empirical necessity to investigate the phenomenon within its real-life
context. Corporate branding and rebranding are diffuse concepts embedded in a
particular context (Czarniawska, 2000). A small number of “critical” or “instrumental”
cases can infer those concepts through qualitative data analysis. Reliance on one or a
few cases might limit the generalisability of the findings; however, they can be helpful
in providing some preliminary insights with the objective of testing with a larger
sample at a later date (Stake, 1995).
The choice of Citigroup and Crédit Agricole was governed by two main factors.
Firstly, we wanted to choose companies that were similar in terms of their business
profile but that had maximum variation on the variables of interest in our research.
Both Citigroup and Crédit Agricole are full-service banking firms that provide a wide
range of services across a broad market spectrum from retail to wholesale and all
shades in between. However, they differ widely in the parameters of interest to our
IJBM study; in particular, they vary in size and in global coverage. As the largest banking
26,5 group in the world with activities in 100 countries, Citigroup is the ultimate example of
a global banking firm. Crédit Agricole, in contrast, is mainly a European firm, strongly
identified with France. Secondly, we wanted companies which had an active record of
mergers and acquisitions to give enough instances to enable us to identify a pattern in
their rebranding strategies, if such a pattern exists. In fact, both Citigroup and Crédit
340 Agricole have pursued very ambitious expansion strategies in recent decades, mostly
achieved by acquiring other companies, at home and abroad.
The information needed to study these cases was all factual; essentially a listing of
all mergers and acquisitions, and this was easily acquired from secondary sources –
the companies’ own websites supplemented by annual reports and press coverage
at the time of the acquisitions. This information was then classified by the researchers
on the basis of core parameters such as relative size of acquirer and target, relatedness
of businesses between acquirer and target (horizontal or diversifying acquisition),
domestic or international, and by the type of rebranding implemented post-acquisition.
These classifications were then validated by having them reviewed by company
personnel to ensure their accuracy and to fill in any gaps.

The cases of Citigroup and Crédit Agricole

Crédit Agricole: history and background
Crédit Agricole was founded in 1860. Its primary function was to supply credit for
French agriculture. Crédit Agricole SA is the largest banking group in France, the
second largest in Europe and the sixth largest in the world by Tier 1 capital according
to The Banker magazine. The group has a decentralised organisation, being majority
owned by 41 French Caisses Régionales de Crédit Agricole Mutuel. Crédit Agricole SA
employs more than 77,000 people and its market capitalisation at 29 December 2006
was e47bn. Crédit Lyonnais was founded in 1863 in Lyon; it was nationalised in 1945.
In the 1990s it faced corruption accusations and scandals and in 2003 it was bought up
by Crédit Agricole and changed its name to LCL in 2006.
The CA group has two main objectives:
(1) to strengthen the Crédit Agricole group’s leading positions in France; and
(2) to consolidate the international acquisitions made in 2006.

Through its subsidiaries, Crédit Agricole SA is involved in the following services.

Retail banking: France and international. Regional Banks (Caisse Regionale du
Crédit Agricole) offer banking services for personal customers, farmers, corporate
customers and local authorities, with a very strong regional presence. The Regional
Banks provide a full range of banking and financial products and services, including
mutual funds (money market, bonds, equities), life insurance, lending (particularly
mortgage loans and consumer finance), and payment systems. LCL focuses on
personal, small business and middle market banking, with a strong focus on urban
areas and a segmented customer approach.
Crédit Agricole SA’s international banking operations are based principally in
Europe and, to a lesser extent, in Africa/Middle-East and Latin America. Crédit
Agricole has forged partnerships with major banks in Italy (Banca Intesa), Portugal
(Banco Espı́rito Santo) and Greece (Emporiki Bank).
 Specialised financial services. Sofinco is a specialist in consumer finance, distributed Rebranding
through retail outlets (cars, household equipment), a direct network of around 100 following M&As
branches, Regional Bank and Crédit Lyonnais branches, and partnerships with major
retailers. Finaref is a specialist in remote provision of financial products (consumer
finance and insurance).
Asset management, insurance and private banking. The Group’s asset management
division comprises Segespar Group with its subsidiaries, including CAAM, and also 341
BFT Gestion, and manages e479.3 billion worth of assets. It offers mutual funds for
retail, corporate and institutional investors, and discretionary management services for
corporate and institutional investors.
Insurance. CA is considered as number two in life insurance in France, with its
subsidiary, Predica, offering investment and death and disability products to CA
regional banks and Crédit Lyonnais customers. Another subsidiary, Pacifica, offers a
very broad range of property and casualty insurance products, which are sold through
the regional banks.
Corporate and investment banking. Calyon was formed by the merger of Crédit
Agricole Indosuez and Crédit Lyonnais’ corporate and investment banking activities to
become Crédit Agricole’s corporate and investment banking arm. Backed by the
Group’s credit ratings and financial solidity, Calyon is now a leading player in financial
markets operating in 55 countries, and is ranked among Europe’s top ten corporate and
investment banks.
To summarise, Crédit Agricole’s brand architecture is typical of a varied brand
strategy which leans towards a “house of brands” architecture (Figure 3).

CitiGroup: history and background

Citigroup was formed on 8 October 1998 following the $140 billion merger of Citicorp
and Travelers Group to create the world’s largest financial services organisation. The
history of the company is thus divided into the history of several firms that over time

Figure 3.
Crédit Agricole’s brand
architecture
IJBM amalgamated into Citicorp. Citibank was founded in 1812 as the City Bank of New
26,5 York. Citigroup, Inc. is nowadays a major financial services company, with 200 million
customer accounts in more than 100 nations. The first logo (1998-2007) of the merged
company was the “red umbrella” (Figure 4) inherited from Travellers. The company
sold its Travelers Property and Casualty insurance underwriting business to Met Life
in 2005. Citigroup still sells all forms of insurance itself, but it no longer underwrites
342 insurance.
Despite divesting Traveler’s Insurance, Citigroup retained Travelers’ signature red
umbrella logo as its own until February 2007 when it decided to adopt the corporate
brand “Citi” for itself and virtually all its subsidiaries (Figure 4), with the notable
exception of Primerica, Banamex and Diners Club. Citigroup is divided into three major
business groups:
(1) Global Consumer;
(2) Global Wealth Management; and
(3) Corporate and Investment Banking.

It also includes one stand-alone business, Citigroup Alternative Investments.

Consumer markets. The global consumer group subdivides into credit cards,
consumer finance, and retail banking. The credit card business proposes 37 different
types of credit card, from Citiw Platinum Selectw to Citi PremierPassw Card. The
consumer finance company, CitiFinancial, is one of the largest consumer finance
companies in the world. Finally, the retail bank division consists of Citibank, which is
the third largest retail bank in the USA. It has branches in countries throughout the
world. Interestingly however, the largest part of retail banking is Banamex, the
number one bank in Mexico, which Citigroup owns.
Corporate and investment banking. The Corporate and Investment Banking (CIB)
division handles large corporate cash management, trade, lending, and investment
banking services worldwide.
Global Wealth Management. The Global Wealth Management division is composed
of The Citigroup Private Bank, Smith Barney, and Citigroup Investment Research. The
Citigroup Private Bank provides banking and investment services to high net worth
individuals, private institutions, and law firms. Smith Barney, which was acquired by
Travelers Group in 1993 and became part of Citigroup in 1998, is the second largest
stockbroker in the world.
An additional division is Citigroup Alternative Investments (CAI) Group, which is
an alternative investments platform that manages assets across five classes:
(1) private equity;
(2) hedge funds;

Figure 4.
Citi (group) first logo and
current logo
 (3) structured products; Rebranding
(4) managed futures; and following M&As
(5) real estate.

In summary, the brand architecture of Citi leans towards the branded house side of the
brand relationship spectrum, with most of its subsidiaries bearing the name and/or
visual identity of the group. 343

Testable propositions
We now investigate the four propositions set out in the literature review in the context
of Crédit Agricole’s and Citigroup mergers and acquisition strategy.
P1. The likelihood of rebranding of targets by acquirers is inversely correlated
with the relative size and marketing strength of the target. Small, weak
targets will tend to be rebranded while large, strong targets will not.
This proposition seems to correspond to the approach of Crédit Agricole. Crédit
Lyonnais, which can be considered as a strong target in terms of marketing assets, was
not rebranded with the name of its acquirer. At the time of the merger, the company
had over 2,000 branches and had an estimated value of e19.5 billion. Although
competitors in many areas, Crédit Agricole’s retail outlets are primarily situated in
rural and medium-sized cities, whereas 50 per cent of Crédit Lyonnais’ branches are
located in cities of more than 200,000 inhabitants. Crédit Lyonnais is one of the oldest
French banks (created in 1863), and was at the beginning of the twentieth century the
largest bank in the world. As a result of its long history and the strength of its retail
network, the brand equity of Crédit Lyonnais can be considered as very strong. The
equity of the brand has been reinforced each year by sponsoring various sporting
events including the maillot jaune (yellow jersey) in the Tour de France for more than
20 years.
The Crédit Lyonnais corporation kept its name but the retail branches were
eventually changed to LCL (the acronym for Le Crédit Lyonnais) while keeping its
historical visual identity of yellow and blue (Figure 5). In the press release “One Group,
two banks” (September 2006), Crédit Agricole justifies its strategy thus:
By choosing to maintain an independent Crédit Lyonnais branch network, Crédit Agricole is
capitalising on the excellent fit between the two brands. They do not have the same
competitors or customers, or even the same growth challenges. The strategy is therefore to
accentuate the differences by forcefully expressing their respective positioning. Hence the
rebranding of Crédit Lyonnais as LCL and the new positioning adopted by the Regional
Banks a year ago, supported by a whole array of commercial initiatives (new products, new
services, new distribution channels).

Figure 5.
The new logo of Crédit
Lyonnais
IJBM The proposition that “weak” targets are rebranded but not strong targets also seems to
26,5 be verified by Citigroup’s attitude towards its subsidiaries. In the retail market, Citi
gradually rebranded all the targets acquired in the USA. As the third largest federal
retail bank in the USA, all the local banks acquired by Citi were rebranded. For
example, in 2001, Citibank NA acquired European American Bank from ABN AMRO
for $1.6 billion and subsequently proceeded to change its name.
344 More recently, First American Bank, a local bank in Texas, became Citibank Texas
following its acquisition by CitiGroup in 2005.
P2. There will be a higher incidence of rebranding from acquirer to target in
wholesale than in retail banking businesses.
Based on the evidence collected from the case, this assertion is also confirmed in the
case of Crédit Agricole. Indeed, Crédit Lyonnais and Crédit Agricole are primarily retail
banks, but it is precisely in this sector that the rebranding did not occur. In business
markets, on the contrary, rebranding occurred in order to signify the strength acquired
by the newly merged companies. Here, two scenarios can be identified.
In the case of the investment banks, the branches of Crédit Lyonnais and Crédit
Agricole Indosuez were merged and renamed under the name Calyon (the coined word
for CA/Crédit Agricole and Lyon/Crédit Lyonnais). The visual identity of the new
company leans towards Crédit Agricole marketing aesthetics (see Figure 6; CA logos,
grey and red colours of the trade bank).
The second scenario is illustrated by the 2005 merger of Crédit Agricole Indosuez
Luxembourg and Crédit Lyonnais Luxembourg, where the name of the acquirer is
adopted for the merged company: Crédit Agricole Luxembourg, the Crédit Agricole
Group’s international private bank within the European Union.
In the area of retail banking, in contrast, consumer-based brand equity (Keller, 1993)
embodied in the name Crédit Lyonnais led to a branding strategy where the names of
both entities were maintained.
For Citigroup, the evidence shows that rebranding of the target firms occurred in
both markets but to a different degree. In the business-to-business sector, partial and
total rebrandings have occurred. For example, following Citigroup’s acquisition of the
Golden State Bancorp in 2002, its subsidiary, Cal Fed, merged into Citibank FSB and
immediately acquired its name. In contrast, the names Salomon and Smith Barley,
which were acquired by Travelers Group and became part of Citigroup in 1998, were
retained for several years, and continued to trade as Salomon Smith Barney. A recent
reorganisation, however, has led to this entity being renamed as Citigroup Global
Markets, Inc. The Salomon Brothers name has now completely vanished, but the Smith
Barney name is still used as a service mark of Citigroup Global Markets (Figure 7).
In the US retail market, Citigroup has gradually rebranded virtually all acquired
firms under its own name (Citibank). Hence, contrary to our expectation, in the case of
Citigroup, it seems that the rebranding strategy – at the national level – has been more

Figure 6.
The visual identity of the
investment bank
systematic in the retail sector than in the wholesale sector, where a dual/endorsed Rebranding
branding strategy is still being used. following M&As
P3. The higher the degree of similarity between markets, the more likely that the
acquirer will rebrand the target under its own name, and vice versa.
This proposition cannot be confirmed or rejected. Evidence shows divergent strategies
irrespective of the similarities between markets. 345
In the case of Crédit Agricole, its two home-grown insurance businesses were given
distinctive, new brand names – Predica and Pacifica. Insurance is typically considered
to be quite a different business to banking and is often kept at arm’s length by banks
through separate branding of the company’s name. Crédit Agricole took a similar
approach for its acquired brand Sofinco, a consumer credit company, which was not
rebranded upon acquisition and continues to trade under its original name. Many
banks have consumer credit arms that charge a higher rate of interest than the main
bank, and it makes sense to keep these at one remove from the parent company by
separate branding. The branding strategy followed by Crédit Agricole with these two
subsidiaries seems to confirm P3, that dissimilar products are more likely to be kept
under separate brand names and not rebranded or brought under the parent.
The opposite of this should also hold true, however, if this proposition is to be
accepted, i.e. subsidiaries with identical or very similar businesses should be
consolidated under a single brand. However, this does not seem to hold true in the case
of Crédit Agricole, which did not impose its name on Crédit Lyonnais following its
acquisition, even though both are in retail banking which are identical or at least very
similar markets. The logic for maintaining this brand separation seems to derive from
dissimilarities in the markets served rather than in the products supplied. Crédit
Agricole is obviously closely associated with rural markets related to its agricultural
origins, while Crédit Lyonnais serves a predominantly urban market which would not
easily identify with a brand associated with agriculture.
In the case of Citi, it seems that an endorsed branding strategy has been chosen
regardless of the degree of relatedness of the market. In the consumer sector, Citi has
rebranded all its subsidiaries so that they reflect their belonging to Citi group. As
Figure 8 demonstrates, this is done in the various, unrelated sectors in which Citi is
involved.
P4a. The stronger the national identity of the acquirer brand, the less likely it will
be to impose its name on a cross-border acquisition.

Figure 7.
Smith Barney, Citigroup
Global Markets logo

Figure 8.
Brand logos for consumer
credit, mortgage and
insurance at CitiGroup
IJBM P4b. The stronger the national identity of the acquired brand, the less likely the
26,5 acquirer is to change it.
To investigate P4, we look at the branding strategies put forward by Crédit Agricole.
Crédit Agricole in fact uses a mixed branding strategy. In retail banking, two different
approaches can be observed:
346 (1) endorsement by Crédit Agricole but preservation of the subsidiary marketing
aesthetics; and
(2) endorsement and alignment of the visual identity of the subsidiary with head
office.

In the first instance, the two subsidiaries of Crédit Agricole in Italy are keeping their
visual identity but are being endorsed by Crédit Agricole (Figure 9). In the second case,
the integration with the head office is more prominent as the logo of Crédit Agricole
becomes the logo of the local subsidiaries (Figure 10).
The fact that different strategies exist for different countries indicates that the
national identity of the acquired brand plays an important role in the rebranding
decision (P4b). A complementary explanation could also be proposed. In the case of
Index, Credit Uruguay, Meridian and Egypt, Crédit Agricole might represent a solid
Western reference in developing (Uruguay and Egypt) and transitioning (Ukraine,
Serbia) markets. In Italy, a French bank such as Crédit Agricole does not represent a
strong guarantee relative to the long-established national icons, Cariparma and
Friuladria. In other words, the relative weaknesses or strengths of the acquired brand
are derived from the strengths or weaknesses of the local market.
Similarly, Citibank can be seen as a strong global brand with a relatively weak
national identity. The data suggest that Citibank’s international branding strategy is to
rebrand acquired local targets. However, the company’s international expansion is
mainly driven by organic growth and not through means of mergers and acquisition.
The case of Banamex suggests that the national identity of the acquired bank (P4b) is
also a determining factor. In this instance, Banamex’s strong brand equity and national
identity led Citibank to adapt its international branding strategy to the specific
conditions in the Mexican market. Strong targets such as Banamex in Mexico get to
keep their brand. Medium strength targets are partially rebranded such as
NikkoCitigroup in Japan (Figure 11). In the cases of CA and Citibank it seems that
the stronger the national identity of the acquired brand, the less likely the acquirer is to
change it.
Table I shows a summary of whether our propositions are accepted for the cases of
Citi Group and Crédit Agricole.
Figure 9.
Logos of the Italian
subsidiaries

Figure 10.
Logos of the Ukrainian,
Uruguayan, Serbian and
Egyptian subsidiaries
Discussion and conclusions Rebranding
The objective of this paper was to bring together the academic literature on branding following M&As
and mergers and acquisitions (M&A) in order to highlight the close connection
between the two topics and to draw attention to the need for corporate executives to
factor branding issues into their strategic decisions. The evidence to date suggests that
branding has been treated as an afterthought in the context of M&A decisions,
something to be tidied up in the implementation phase after the deal has taken place, 347
rather than being considered as an intrinsic part of the decision (Ettenson and
Knowles, 2006). We would argue that this oversight represents a lost opportunity, and
that a more conscious consideration of branding in the planning phase would provide a
means to enhance the value of the deal.
Based on the literature and industry review, we proposed a conceptual
framework that puts branding at the heart of M&A decision making process. A set
of propositions was put forward concerning the strategic and structural factors that
are likely to influence the nature and direction of rebranding decisions in the
context of M&A transactions. These propositions dealt with the relative size of
acquirers and targets, whether their businesses were in consumer or
business-to-business, the similarity/dissimilarity of their businesses (e.g. banking
versus insurance), and geographic issues, i.e. whether the acquisition is domestic or
transnational. An initial investigation of our propositions was then carried out by
examining two prominent cases in the financial services industry, namely Crédit
Agricole and Citigroup.
The analysis of the two cases suggested that the size and marketing strength of the
target relative to the one of the acquirer is the most significant variable influencing the
branding decision. In both cases, decisions to rebrand can be directly traced to the
Figure 11.
An illustration of different
rebranding strategies

Propositions CA Citi Group

P1 The likelihood of rebranding of targets by acquirers Accepted Accepted

is inversely correlated with the relative size and
marketing strength of the target. Small, weak targets
will tend to be rebranded while large, strong targets
will not
P2 There will be a lower incidence of rebranding in Accepted Not accepted
consumer (retail) markets than in businesses
markets
P3 The higher the degree of similarity between markets, Not accepted Not accepted
the more likely that the acquirer will rebrand the
target under its own name, and vice versa.
P4a The stronger the national identity of the acquirer Accepted Accepted
brand, the less likely it will be to impose its name on
a cross-border acquisition
P4b The stronger the national identity of the acquired Accepted Accepted Table I.
brand, the less likely the acquirer is to change it Summary of propositions
IJBM relative market weight of the players involved (P1). The general proposition that
26,5 relatively small “weak” targets would be rebranded but not strong targets seems to be
strongly supported by the evidence from both Crédit Agricole and Citigroup. Even in
an international context (P4), exceptions to the branded house strategy pursued by Citi
seemed to be based on the relative marketing strengths of the target (as in the case of
Banamex, for example).
348 The evidence also suggested that rebranding is more likely to occur in wholesale
than in retail banking businesses, supporting P2. Crédit Lyonnais and Crédit Agricole
are both primarily retail banks and rebranding seemed far less likely to occur in that
part of their businesses. In their wholesale businesses, on the contrary, rebranding
occurred very frequently in order to signify the strength acquired by the newly merged
companies.
Another interesting but unexpected finding is that the degree of similarity between
markets does not seem to be a determining variable in the decision to rebrand or not
(P3). In the case of Citigroup, the company seemed to follow a clear “branded house”
strategy which implies a rebranding of the targeted firm regardless of its domain of
activity. The “Citi” brand name is applied to replace multiple, complex sub-brand
structures to achieve cost efficiencies. In such a corporate dominant system, the
reputation of the corporation is believed to critically influence consumers’ perceptions
of the services (Knox, 2004). In the case of Crédit Agricole, the pattern of the brand
strategy is less obvious. The corporate investment bank was actually rebranded as
Calyon, with a clear endorsement of Crédit Agricole, but the retail branch of the Crédit
Lyonnais kept its very distinctive visual identity.
Our evidence also provides support for P4a and P4b, which suggest that the
national identity of the acquirer and the acquired brand would play an important role
in the decision as to whether to rebrand. In the cases of CA and Citibank it seems that
the stronger the national identity of the acquired brand, the less likely the acquirer is to
change it. The case of Banamex in Mexico is the most vivid illustration of this. Crédit
Agricole follows a slightly different strategy, although one that is still consistent with
the idea that acquired brands with strong national heritage would be less likely to be
rebranded. They opted for a brand endorsement strategy, leaving the acquired brands
with their original names but adding the new parent’s name as an endorsement. In
some cases, the acquired brands also retain their visual identity but in others they are
brought into alignment with the Crédit Agricole identity. The two subsidiaries of
Crédit Agricole in Italy, for example, are keeping their visual identity but are being
endorsed by Crédit Agricole.
Summarising the findings of these case studies, it seems that both companies
actually follow a mixed branding strategy, the logic for which is not easy to
ascertain. If a branded house is designed to bring synergies among the various
levels of the brand hierarchy, how can Citi leave Banamex as an independent brand
entity when it is Citibank’s most powerful retail business unit? Equally, if a house
of brands is designed to allow each brand unit to maximise its own brand equity,
why did Crédit Agricole choose to suppress the equity of Crédit Lyonnais
Investment bank?
Such anomalies demonstrate the complexity of the branding decisions facing large
companies, such as Crédit Agricole and Citigroup, which have broad portfolios of
products serving multiple geographic markets. Earlier research suggests that the
dominant branding strategy practised by such companies is best described as “mixed Rebranding
branding”, with few or none matching closely to the extreme models of either a following M&As
“branded house” or a “house of brands” (Laforet and Saunders, 1999, 2005). Our
findings broadly corroborate this evidence but go a step further by suggesting that the
mixed strategy is not random or an accident of history, but is the result of a practical
strategy for building a coherent portfolio of brands over time and through a sequence
of acquisitions. Our findings suggest that the companies had a definite branding 349
strategy that tended towards either a branded house (in the case of Citigroup) or a
house of brands (in the case of Crédit Agricole). This general strategy was modified,
however, to suit particular circumstances, with the resulting portfolio diverging
somewhat from the theoretical model.
Of course, these findings are speculative, based on a review of secondary data on
what the companies actually did. There is obviously considerable scope for further
research to validate these findings, perhaps starting with interviews with the
companies’ personnel to get first hand information on their strategic thinking at the
time. There is also an interesting opportunity to see whether and how customers
responded in cases where acquired businesses were rebranded or left as before. Were
customers aware of the change of ownership? Did rebranding affect their attitude
towards their bank? Did their behaviour change as a result? Brand tracking studies
which permit an ex ante and ex post analysis of attitudes and behaviour would be the
ideal way to gather this information if the case companies carried out such studies. In
the absence of this, however, an ex post study of attitudes and behaviour would be the
next best way of gathering useful information on this topic.
On a broader note, the role of marketing in mergers and acquisitions is a very
important question with many dimensions, few of which have yet been addressed by
marketing researchers. The issue of rebranding which this paper addressed is just one
topic among many and there is obviously considerable scope for further research. The
motivation for mergers and acquisitions needs to be examined to establish the extent to
which marketing objectives are the drivers of the transactions, as distinct from cost
savings or other operational benefits, which have received far more research attention.
The extent to which these marketing objectives are achieved post-acquisition is
another key question and, in particular, the issue of whether the brand equity acquired
through merger or acquisition, typically at a high cost, is actually preserved or
enhanced post-acquisition, or absorbed and lost. These questions raise difficult
measurement issues which might be best addressed through a collaborative effort by
marketing and economic researchers.

Notes
1. Abbey National in the UK spent £11 million in implementing a slight change of name
(dropping the word “National”) (Dickson, 2003).
2. See www.marketingpower.com/mg-dictionary.php (accessed 24 April 2008).
3. Source: www.aviva.com (accessed 6 June 2003).

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Further reading
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Acquisitions in the European Financial Services Market, PricewaterhouseCoopers, London,
26,5 April.

About the authors

Mary Lambkin is Professor of Marketing at the Smurfit School of Business at University College
352 Dublin. She has published widely in the leading marketing journals and is also involved in the
business world, serving as a non-executive director of several major companies. Mary Lambkin
is the corresponding author and can be contacted at: mary.lambkin@ucd.ie
Laurent Muzellec is a lecturer at Dublin City University. He holds a PhD from the School of
Business at University College Dublin, an MBA from Texas A&M International University and a
BA in Political Science from IEP, France. He has worked as a trade attaché for the French
Diplomatic Service and as a business development manager for a hi-tech company.

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