November 1, 2017
Deal Certainty: Solid PR Strategy Increases Chances of Closing
This recent Norton Rose Fulbright blog flags a UK study that says that a solid public relations strategy can increase the likelihood that a deal will close. Here are some of the study’s conclusions:
– Proactive announcements count: 84% of deals announced as actual offers are completed, compared with just half of those which were announced in response to a leak
– Leadership matters: announcements with statements from both companies’ chairman/CEO are associated with significantly higher levels of success than those without
– Markets reward uncertainty – in the short-run: leaked M&A deals, or announcements lacking information about the underlying strategic rationale, are actually rewarded by the markets in the very short term
– PR firms earn their fees: deals involving PR firms have a higher chance of completion than those without
– Nail down the narrative: a clear message can be obscured in the process of crafting a deal announcement – it’s important to ensure key players are on board with the deal narrative from the start.
The blog says that a good public relations strategy can also help reduce the risk that opposition from consumers or other constituencies might cause regulatory problems for the deal:
The importance of a well thought-out public relations strategy can go beyond just getting the deal closed. Increasingly consumers are paying attention to combinations of large corporations and how such mergers or acquisitions may affect them in their day-to-day lives. In the past, consumers have been mobilized by corporations opposing a proposed merger between competitors by taking out advertisements and using social media campaigns that claimed the proposed transaction would lead to higher service fees or less choice for consumers.
Such campaigns have led to consumers protesting such mergers and writing to regulatory bodies in opposition of the proposed deal. Starting a public relations campaign early that shows the benefits of a proposed transaction can prevent such anti-merger campaigns from taking hold and creating regulatory and PR problems down the road.
– John Jenkins