Why is PR important in mergers and acquisitions

Mergers and acquisitions frequently occur in the corporate world. Public relations, focusing on managing reputations in challenging times, has much to offer in an M&A environment. In fact, M&A public relations is often overlooked. Here, though, we’ll learn everything there is to know about the role of PR when organizations join forces or acquire other companies.

published: March 11, 2024
updated: June 26, 2024

Mergers and acquisitions can be long and winding roads, the accumulation of a lot of hard work, negotiations, and planning. But now the deal is ready, and the changes must be communicated. Yet, a lot of companies come unstuck.

During the process, weak, mistimed, or scarce communication sows the seeds of distrust and confusion. The danger is that the damage could be permanent and follow you to the next venture. One of the problems is that there are so many stakeholders to consider: employees, customers, shareholders, regulators, etc. All have different priorities and expectations. You must ensure existing customers remain happy enough not to jump ship and go elsewhere. You also must comply with regulators, win shareholder happiness, and public understanding of the transition (think here about future customers). Including a PR strategy in your M&A planning is essential to give you the best chance of success. We’ll go over the role of PR in mergers and acquisitions, different strategies, how to write an M&A press release, and how a PR agency can support M&A.

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What is the role of PR in mergers and acquisitions?

M&A activity can be summarised as when two or more companies merge to form a larger entity or when one company buys another to expand its operations. These transactions profoundly impact market dynamics, company structure, and shareholder interests.

PR can play a pivotal role in the success of this process. Perhaps this is because it involves shaping positive public opinion, sharing positive news, and handling any negative comments or sentiments. In short, the full spectrum of marketing communications. Comms planning can benefit the whole process of M&A, from start to finish, from acquiring or being acquired, creating a narrative to support changes, ensuring all stakeholders are informed, and supporting team integration.

Public Relations plays a crucial role in managing communication and mitigating confusion surrounding the merger or acquisition process.

By working closely with departments such as HR, Legal, and other relevant stakeholders, the PR team ensures that key information is effectively communicated to internal audiences, such as employees. This often involves creating internal briefs and distributing FAQs to provide clarity on the merger or acquisition and address any potential concerns or questions employees may have. By keeping employees informed and aligned, M&A PR helps to maintain unity within the company, particularly when facing inquiries from the media or external stakeholders about the events taking place.

Externally, M&A public relations focuses on presenting a cohesive and unified message to external stakeholders, including investors, customers, partners, and the general public.

This synergy in messaging is essential for maintaining trust, managing perceptions, and ensuring a smooth transition during the merger or acquisition process.

By maintaining synergy in messaging across all external communications, M&A public relations helps to build confidence, minimize uncertainty, and foster positive perceptions among external stakeholders throughout the merger or acquisition process.

What is the role of PR in mergers and acquisitions?

PR’s internal communication role

Often, a restricted period (known as the ‘Quiet Period’) applies to prevent disclosure of information. This is to guard against insider trading and ensure fairness to investors. Because of this, it isn't always possible to communicate the merger or the acquisition to employees until the dotted line is signed.

Any communication plans should be drawn up beforehand to explain the reasoning, benefits, and vision behind the deal, and once the picture is clear, disseminated at the earliest opportunity. People finding out via external news is not the best way to win hearts and minds.

Your message should be consistent and address the needs and concerns of your audiences, highlighting how this deal will create value and opportunities.

Some things to consider would be how you want to officially communicate the changes and why they're taking place, providing Q&A sessions where people can express their concerns, and letting people know exactly what will happen, when, and how they fit in.

PR’s external communication role

Developing an external communication strategy to share how the new entity will operate and what it’ll look like is another important step. You need to make clear how these changes will impact customers. It’s best to write to them. This makes it more official and makes them take notice.

Think about how you’ll keep people updated on changes throughout, perhaps through a newsletter that deals specifically with changes, or by another strategy.

PR’s brand communications role

After a merger or acquisition, many aspects of the company can change. The company name, tone of voice, logo, and other visual identity markers could be the first change - as could the mission and values. PR can help you communicate these changes and convey their meaning to internal and external parties, providing powerful narratives behind the changes.

Different strategies of PR for M&A

External ​​stakeholder engagement

Your stakeholders want to get excited about the M&A.

Customers, investors, and shareholders - they all want to be part of the change.

They want to see where they fit in. But they probably have questions and might not fully understand everything yet.

You should look to launch initiatives designed to engage with those directly impacted by the M&A. This could involve town hall meetings, online Q&A sessions, or a social media strategy that positively highlights the changes and reassures customers why this merger makes perfect sense and why now. This demonstrates a commitment to openness, builds trust, and mitigates concerns.

M&A ambassador program

Your employees are your greatest asset.

Look to implement programs that turn your employees into advocates.

This may include internal campaigns that educate people on the benefits of the acquisition, training that equips them with any new skills they need, and internal platforms that let them share their knowledge and experiences.

Engaged and informed employees bring their work home with them. They talk about it to family and friends, post about it on social media, and encourage others with their positivity.

Strategic storytelling

Look to develop a compelling narrative that outlines the reasons behind the decision taken and emphasizes the benefits. A cohesive message is essential.

A strong narrative will help to build a positive brand image for the newly formed company.

Use storytelling to bring attention to the companies' synergies, shared values, and positive vision for the future. Think about what your brand stands for and what it wants to accomplish. Storytelling will be more meaningful when you keep your vision and values in mind. Understand your audience well and create stories that appeal to them.

Thought leadership

One PR strategy is to increase the visibility of your leadership team through thought leadership. This can be via a mix of written pieces, LinkedIn posts, or guest speaking. If relevant, leaders from both companies should present a united front, offering insight into industry trends, an in-depth rationale behind the M&A, and what it’ll bring to the industry. State what it’ll look like in 5 years and ten years. Also, how does the deal relate to previous changes, and what does it signify to the market?

Example of TL tactic: Media Interviews - Spokespersons from the involved companies participate in media interviews to provide further insight into the merger or acquisition. These interviews are coordinated to ensure alignment in messaging and to reinforce key talking points about the transaction's goals, potential synergies, and anticipated outcomes.

This strategy can build credibility and trust and position the new entity as an industry leader in people’s minds.

Sell the ideal dream

Your press releases will probably talk about combined ‘synergies” between the firms - and this is all true, but, it's also about much more than that. It's about real financial growth and trying to transform the industry.

It's about having greater capabilities, being more competitive and efficient, and doing more for your customers. It is this vision that you need to sell to your audiences. Your press release is the first chapter of your new story, its important to start it tight and make an impact.

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How to write an M&A press release

A business merger and acquisition press release is a useful tool for a company looking to break the news that it is merging with another outstanding firm or is part of an acquisition. It should give details about the newly introduced firm, and details of the new deal, such as important dates, plans, and implications. A well-written press release can shine a light on the transition and inform the media and public about the exciting new development and its significance. Timing it right will mean optimal media coverage and allow you to build trust with important industry observers and the public.

Your press release should follow the standard press release format. Place your company name, contact number, and email address at the top left, right below your logo. Under here, state ‘FOR IMMEDIATE RELEASE.’ With that, you’ll need an attention-grabbing headline. It should be informative and captivating.

Now you’ve set the tone, follow with your sub-heading.

This needs to summarize the rest of the content and make the reader want to read more. From here, give the location and dateline. If it involves two companies in two locations, provide both locations. Next, you’ll need a summary. Specify the companies involved, the nature of the transaction (is it a merger or an acquisition?), its objectives, when it began, and the expected timeframe for completion.

Your next paragraph needs to include more information on why this partnership was formed. What new capabilities will it bring? Perhaps you can enter new markets or significantly increase your market share. Briefly relate this to your long-term goals. Now, provide a quote from the CEO/President, or another leadership team member. The quote should reiterate how this fits into the business’s long-term strategy. Also, mention how it will impact customers and the community. Provide a quote from the other company, too.

Make the heading ‘About [Business Name]’ and explain what the first business does. Then repeat for the second (if applicable). Relate both their mission statements to the goal of the merger or acquisition.

Detail any important leadership shifts, the impact on employees, and the location where operations will take place.

If there is a photo that incorporates the new team or members of it, then use it.

Lastly, add the boilerplate followed by relevant contact information.

IMPORTANT: Remember the 5Ws - the why, what, where, when, and who. Address why it's newsworthy, and provide only the most relevant data you want people to grasp (you probably have lots but try to limit it).

How to write an M&A press release

How can a PR agency help to support M&A?

Hiring a PR agency to handle your M&A communication could be wise. PR professionals are adept at handling such communication strategies. This includes creating messages about the merger’s benefits that bring them to life, drafting and sending out press releases that get you maximum exposure, and being a point of contact for media inquiries and questions.

Hiring an agency means you’ll be in the hands of experienced professionals so that you can focus on the M&A itself.

Agencies can also handle your internal communications to keep your employees informed and engaged so you gain their support. A PR agency can also help support M&A by communicating to potential investors the implications to financial performance and gain their interest.

Doing this in-house can result in the acquisition being handled entirely under one roof by the people who know the most about it. But it will mean allocating time for media outreach and fielding media questions.

It's easy to get something wrong here if you’re inexperienced.

With an agency, they’ll be able to answer media inquiries for you and feed them the info they need to make a story, and handle any negative comments. You only get one chance to make a good impression, letting an agency help you set the tone for how you want this to go may be smart.

Conclusion

As you’ve seen, financial PR can play an important role in the M&A process; before, during, and after. We’ve looked at the strategies PR professionals may engage in, provided a guide on writing M&A press releases, and shown how an agency can help. Blending corporations is no mean feat.

Clear and meaningful communication helps the process run smoothly and helps get stakeholders on board with the transaction.

Mergers and acquisitions bring a host of uncertainties, and there can be economic risks at stake. Are you in the process of either a merger or acquisition and looking at what public relations can do to help? If yes, our team can help you get started today.

March 11, 2024
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