Name change for a game change- ACE acquired Chubb

Most of information about the deal can be found on internet.

However, a long story short:

It is not an acquisition of a broken company by a successful company but a joining of two greatly successful giants. The most awkward M&A where acquirer adopted the name of target.

You heard it right. ACE acquired Chubb to become… Chubb.

Why so? Even as an outsider I cannot stop asking myself hundreds of questions. Now if you are a part of ACE, an employee. How would you feel? Imagine that you have stood for something in a while, worked your heart out for a name that since when you do not know, has become your identity. Would you be frustrated when such an identity will soon go into oblivion (I am a little bit exaggerated here)? I would, definitely.

Evan Greenberg, CEO of ACE, also acknowledged what he might have to confront – loyal employees’ negative reactions. “ Do you think for a minute that that idea [adopting Chubb name] goes down well inside ACE? Do you think they all are uplifted by that? No, they’re offended by it” , he said. Then why? Why did Mr. Greenberg ever want to walk such a tough route?

First and foremost, it comes down to branding value. Chubb for a long time has been best known as a provider of specialty insurance for wealthy clients. Have you heard that Jennifer Lopez insured her bottoms or Heidi Klum insured her legs at shocking prices? Check out this link to keep you in awe for a while. Of course, these policies are somewhat extreme but they can give you an idea who might be Chubb’s clients.

In my humble (and subjective) opinion, changing to Chubb name has two-fold benefits in term of branding value perception from customers’ point of view. It makes sure that the upscale client base from the old Chubb are still satisfied with the premium brand that they have trusted for long. At the same time, it gives general client base from both companies the access to the premium brand name. The vice-versa, on the other hand, might observe a withdraw from the upscale clients.

Last but not least, please keep in mind that this is not a kill-off acquisition. Both the names live up to their legends. Either ACE or Chubb name gives a sense of strong security and lasting growth to its policy holders. In terms of operation, ACE is famous for its brokerage system while Chubb is well-known for its agency culture. If the Horizontal M&A can achieve what it is meant to achieve, to combine the strength from each company, the new giant is not just about its size but all about its supreme operation. The combination of potential synergy and greater branding value keeps telling me that Mr.Greenberg’s decision is indeed appropriate.

The “New” Chubb is going through an important restructuring at the moment. In spite of a promising future, the turmoil and uncertainty from the inside are inevitable. Only time will answer whether the giant will continue to live up its name. For now, I have already felt nostalgic to hear that soon New York Stock Exchange (NYSE) will no longer have a code name ACE (which is replaced by code name CB).

Bye ACE. Feel like I am saying good bye to Batman because Bruce Wayne is now wearing Tony Stark’s suit.