THE CHALLENGE OF NAMING A MERGED CORPORATION – U.S. CORPORATE

It has typically been the case that when corporations merge, they name the new entity a combination of the names of the merged companies.

For example, when the banks JP Morgan and Chase merged, they assumed the new name of JPMorgan Chase which is lengthy but leaves little doubt about the origins of the new entity.  Recently, a new banking merger that has established the nation’s sixth largest retail bank has joined BB&T based in Winston-Salem and SunTrust based in Atlanta.  The new corporation has endeavored to find an absolutely new name that has no real identity to the banking past of either bank and has adopted the name “Truist Financial Corporation.”  The consultants who were hired to develop the new name have explained that the “tru” part of the name is meant to reflect that the new corporation is “staying true” to the banks’ legacy and the “st” means “standing for better” in the banks’ customer communities and in service to customers (ref. WSJ).  According to the consultants, the naming process was a great balance “of creativity and strategy, of science and art, and of the heart and mind.”  Apparently, the name was chosen from a list of thousands of potential names and was specifically meant to portray a name that “doesn’t sound like any bank we’ve seen or experienced before .”  After the name was announced, a survey of customers had 68% agreeing with them, but in opposition to the name, not in favor.  One customer proclaimed that “It sounds like a pharmaceutical drug, not something I would be happy to have on my checks.”  With that thought in mind, it will be interesting to see if aversion to the name is enough to cause customers to close their accounts.  A consulting firm that works on branding for companies has said that “you need a name that is capable of evoking pleasant feelings. . . and if it doesn’t mean human sacrifice in another language, you’ll be OK – at some point things just harden into permanence.”  It might be that the jury is still out on the naming accomplishment.   But, then, people point out that the name “Google” was made fun of when first heard of it.  Perhaps – but it seems that there might be a difference between a search engine being named a frivolous name versus a staid bank with an incomprehensible title – when the new corporation announced its new name, investors flooded bank analysts with emails, most of which were complaints about the name (ref WSJ). Perhaps the best solution is to quickly adopt the initials “TFC” for the new entity, rather than to continue to use the name.

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