In the dynamic world of business, mergers and acquisitions (M&As) represent strategic moves companies make in hopes of gaining a competitive edge, expanding their reach, or diversifying their portfolio. However, not all M&As culminate in success stories. From cultural clashes to operational inefficiencies, the road to integration is fraught with challenges. 

This article delves into some of the most notable failed mergers and acquisitions, shedding light on the reasons behind their downfall. Moreover, we'll explore the common challenges companies face during M&As and how modern tools can be game-changers in navigating these complexities.

Also read: How to Handle Your Creative Operations and Rebranding During a Merger or Acquisition?

Failed mergers examples

Here are examples of failed mergers of famous brands. 

Kraft Heinz and Unilever

Deal Size: Proposed at approximately $143 billion.

In 2017, American food conglomerate Kraft Heinz made an ambitious bid to merge with British-Dutch consumer goods company Unilever. The unsolicited proposal took many by surprise, given the size and implications of such a merger.

Cause: Unilever swiftly rejected the offer, citing significant differences in corporate culture, especially regarding sustainability and long-term investment. There were also concerns about the potential for aggressive cost-cutting measures by Kraft Heinz.

What could have been done better: A more collaborative and transparent approach from the onset might have been beneficial. Ensuring alignment in corporate values and long-term visions would have been crucial for such a significant merger.

eBay and Skype

Deal Size: $2.6 billion.

In 2005, e-commerce giant eBay acquired the communication tool Skype, hoping to integrate voice communication into its platform, thereby enhancing communication between buyers and sellers.

Cause: The expected synergies never materialized. The integration of a communication tool with an e-commerce platform proved more challenging than anticipated.

‍What could have been done better: A clearer post-acquisition integration strategy and a better understanding of how voice communication would benefit eBay's core business would have been beneficial.

Read more: The ultimate guide to collaboration between two teams.

Mondelez International and Hershey's

Deal Size: Proposed at $23 billion.

In 2016, Mondelez, known for brands like Oreo and Cadbury, made a bid to acquire American chocolate giant Hershey's. The merger would have created the world's largest candy company.

Cause: Hershey's board unanimously rejected the bid, citing a low offer and potential regulatory hurdles.

What could have been done better: A more collaborative approach, possibly starting with partnerships or joint ventures, might have paved the way for smoother acquisition talks.

Microsoft and Nokia

Deal Size: $7.2 billion.

In a bid to enhance its mobile presence, Microsoft acquired Nokia's Devices and Services division in 2014. The acquisition included the Lumia brand of smartphones.

Cause: Despite the merger, Microsoft struggled to gain significant market share in the mobile sector, dominated by Android and iOS.

What could have been done better: A more focused strategy on how Nokia's hardware could integrate with Microsoft's software ecosystem might have yielded better results.

Quaker Oats and Snapple

Deal Size: $1.7 billion

In 1994, Quaker Oats, known for its cereals, acquired beverage brand Snapple. However, by 1997, Quaker sold Snapple at a significant loss.

Cause: Quaker Oats struggled with the distribution and marketing of Snapple, leading to declining sales.

What could have been done better: A deeper understanding of the beverage industry and better integration of Snapple and Quaker's distribution channels would have been crucial.

Vine and Twitter

Deal Size: Estimated at $30 million.

Twitter acquired Vine, a platform for short, looping videos, in 2012 before its official launch. Vine gained significant popularity, but by 2016, Twitter announced its discontinuation.

Cause: Monetization challenges, coupled with competition from platforms like Instagram and Snapchat, led to Vine's decline.

What could have been done better: Diversifying Vine's offerings and better integration with the main Twitter platform might have prolonged its relevance.

Challenges companies face during mergers and acquisitions

Mergers and acquisitions (M&As) come with a myriad of challenges. Here's a breakdown of some of why mergers and acquisitions fail and how brand asset management tools can help address them:

Brand consistency

Challenge: Merging companies often have distinct brand identities. Maintaining consistency across all brand touchpoints during and after a merger can be daunting.

Also read: Brand Identity Prism: What Is It and How To Use It? - Artwork Flow

Solution: Use a brand asset management tool to centralize all brand assets and ensure that teams from both companies have access to the same resources. This ensures consistent branding across all channels.

Communication gaps

Challenge: Effective communication is crucial during M&As. However, there can be gaps, leading to misinformation or missed opportunities.

Solution: A centralized platform ensures that all stakeholders have access to the same information, reducing communication gaps.

Loss of brand equity

Challenge: M&As can dilute or confuse brand equity if not managed correctly.

Solution: Maintain consistent branding and ensure that all brand-related decisions are informed by a centralized repository of assets and guidelines so companies can preserve and even enhance brand equity.

Read more: How to measure and improve brand equity 

Training and Onboarding

Challenge: Employees from one company might need training to understand the brand guidelines and assets of the other.

Solution: Use a brand asset management tool. These tools often come with features that allow for easy onboarding, ensuring that employees quickly understand and adhere to new brand guidelines.

Wrapping up 

The landscape of mergers and acquisitions is as promising as it is perilous. While the potential for growth and innovation is immense, the pitfalls are numerous. As we've seen from the examples above, even industry giants aren't immune to M&A challenges. 

However, in this digital age, companies are no longer left to their own devices. Brand asset management tools like Artwork Flow offer a beacon of hope, ensuring brand consistency, streamlining communication, and preserving brand equity.