Brands- invaluable assets?

Abstract: Background: In order to make financially logical decisions it is important to know the real value of all assets in a company. Brands are intangible assets that are often said to be of great value in the context of mergers and acquisitions. Despite this fact, they are rarely given an exact financial figure. Purpose: The purpose of this paper is to investigate the significance and value of brands in M&A. By this we aim to contribute to the understanding of brands in the context of M&A and try to find out if brands are invaluable assets in both respects. Realisation: We have studied theoretical findings on the subject and thereafter made our own study of two cases of acquisitions; the acquistition of Candelia by Cloetta and that of NK Cityfastigheter by Hufvudstaden. Results: We have found that brands represent a real financial value to companies. Financial evaluations however seem to be of lesser importance in the context of M&A. In these situations it appears as if valuation of brands mainly serves as an arbitrary basis for negotiations. The question of the good fit between companies and other brands is seem to be the most important issue in M&A.