Effects of mergers and acquisitions on brand loyalty in luxury Brands: The moderating roles of luxury tier difference and social media

Abstract

This study examines the effects of the perceived evaluation of mergers and acquisitions (M&As) on the brand loyalty of consumers toward the acquired brand, the moderating effects of luxury tier differences, and the media used for delivering the M&A news. Our results reveal that the evaluation of M&As has a positive relationship with perceived brand beliefs and luxury values, and consequently on brand loyalty. The moderating effect of luxury tier differences on the relationship between M&A evaluation and perceived values is stronger when the acquiring brand is from a lower luxury tier. However, the moderating effect on the relationship between perceived values and brand loyalty is stronger when the acquiring brand is from a higher luxury tier. Social media has different moderating effects than traditional media. Our study provides useful insights into luxury brand M&As for both academics and practitioners.