Brand Valuation Framework for mergers and Acquisitions !!!

“If this business were split up, I would give you the land and bricks and

mortar, and I would take the brands and trade marks, and I would fare better than you.”

— John Stuart, Chairman of Quaker (ca. 1900)

In the age of  high business growth Companies prefer both organic and

inorganic path for expanding their businesses.  Either to enhance their

product offerings or to target newer markets  , companies are preferring

route of mergers and acquisitions.

During mergers and acquisitions one company buy target company. This

buy  out consist of two parts. One is the assets of the targets companies,

which are reflected in book value, while there is another component

that need be assessed is that is intangible, often referred as brand

equity. This intangible part at times is of equal weightage as that of

tangible assets part.

During Mergers and Acquisition how this is to be valued becomes

utmost important. The objective of this paper is to understand the

factors that determine the value of target firms’ brands in the context of

mergers and acquisitions.

In this paper we are developing a framework for measuring brand equity

in  case of Mergers and Acquisitions. This framework can be applied in

all those cases where brand equity is comprised of all similar assets as

assumed in this  paper.

Key Terms:  Brand Equity, Valuation, Merger and Acquisitions

This is abstract of the Term paper submitted for Brand Management subject by the Author at Department of Management Studies, IIT Delhi. This frame work has been developed by the Author under supervison of Dr Mahim Sagar, Astt professor, DMS, IIT Delhi.