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Monday, January 31, 2021

With the announcement of former Baby Bell SBC’s merger aquisition of AT&T, Dow Jones reports that the combined company might ultimately adopt the older AT&T name:

Given the cost efficiencies, it would be desirable to fuse these into one brand at some point or two brands maybe,” Alan Siegel, chairman of branding consultancy Siegel & Gale, a unit of Omnicom Group Inc.

“You use the best name … and you don’t get involved in ego,” he said. AT&T is “an iconic name. It’s got an amazing heritage to it. It’s got tremendous strength.”

While SBC has a name that’s strong in the markets it serves, it isn’t well- known in the rest of the country, let alone in foreign markets. “It just cannot compete with the century-plus strength of the AT&T brand,” says Rob Rich, an analyst at research firm Yankee Group.

The notion of the acquirer donning the acquired company’s identity isn’t as unusual as it might seem:

It wouldn’t be the first time an acquirer took a target’s name. When America Online bought Time Warner Inc. in 2001, it became AOL Time Warner, until it dropped the tarnished AOL part in September 2003. Chase’s 2004 acquisition of J.P. Morgan gave the tony investment bank top billing in the renamed JPMorgan Chase & Co.

Here are a couple more such examples, just from my memory (and past blogging):

- WorldCom morphing into MCI and moving its headquarters to MCI’s digs, albeit well after buying it

- NationsBank taking on Bank of America’s name

- First Union taking on Wachovia’s name

I know in more than a few such instances, taking the plunder’s name is a rather cynical maneuver: The buyer had done such a rotten job with customer service and other areas that their brand equity was practically beyond repair. So the quick fix is to re-boot under a brand that’s suddenly newly-owned, and has an established track record. I know this was the case with the First Union-Wachovia deal.

The notion of wayward corporate children eating their former parent companies, then assuming their brand identities, seems somehow perverse. But it keeps things interesting.

- Costa Tsiokos, Mon 01/31/2005 09:04:41 PM
Category: Advert./Mktg., Business | Permalink |

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  1. At least Viacom hasn’t contemplated renaming itself CBS. Yet.

    Comment by CGHill — 01/31/2005 @ 10:08:26 PM

  2. Even though CBS is their crown jewel, the have so many other powerful properties — MTV, Comedy Central, Infinity Radio — that I think it’s unlikely Viacom would choose CBS as a single ID.

    However, if so, it wouldn’t be the first time the CBS name has “taken over” a parent. Westinghouse Electric renamed its whole operation to CBS two years after buying the network; it made sense, since the company shedded all its non-media assets during the maneuver. Viacom subsequently bought the reformed company shortly afterward.

    Comment by CT — 02/01/2021 @ 09:50:54 AM

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