In the world of M&A, discretion is the one of the most important elements, as all parties involved are under an ethical and contractual obligation to keep details private until the time is right to announce the deal. During this period, acquisitions are often given cryptic codenames to avoid drawing unnecessary attention.
Here is a selection of some codenames given to significant M&A deals and the meaning being them.
Superheroes
What could be a better disguise than the name of a superhero? When Reynolds American Inc. acquired Lorillard Inc. in a $25 billion deal, the participants were named after our favourite crime fighters and their foes. The four parties involved included: Reynolds with the name Robin, Lorillard was Lantern, British American Tobacco was Batman and Imperial Tobacco was Ironman.
Project Helix
When Kraft Food Inc. set its sights on British chocolate manufacturer, Cadbury, the M&A team looked to ancient Greece as its muse for the project name. Kraft became ‘Krypton’ (from the Greek for ‘secret’) and Cadbury was ‘Chromium’ (the ancient Greek for ‘colour’). The deal, nicknamed Project Helix, takes its name from the scientific term for a convoluted spiral shape.
Galaxy
Astronomical names have also proven popular. When Emerson Electric Co. acquired Chloride, the British power firm, the £1.5 billion deal-makers chose the name ‘Galaxy’, with the participants being referred to as ‘Earth’ and ‘Mercury’.
You’ve Got Mail
The codename for Verizon Communication’s £2.8 billion takeover of AOL “Project Hanks” cleverly referenced the hit 1988 film “You’ve Got Mail” starring Tom Hanks and Meg Ryan in which the characters’ online romance escalates to the sound of AOL’s unique email notifications. It was not a coincidence that 1998 was one of AOL’s most successful years, with its stock price rising almost 600%. Using contemporary cultural references can be a smart way to disguise a deal.
Project Oboe
Musical instruments can also be the inspiration for M&A codenames, with Project Oboe the nom de plume for Aviva’s £5.6 billion takeover of Friends Life. The two companies were called Accordion and Flute respectively, giving credence to research that shows 20% of all codenames take their names from the initials of the companies involved.
These days, to avoid the possibility of human error when naming projects, M&A deal codenames are increasingly generated by random computer programmes, so we may be witnessing the end of an unexpectedly creative streak in deal nomenclature.
We’re actually rather boring at AA Chase. Our projects are just numbered. 16-012 means Project number 12 of year 2016. Each client or deal participant is known by their AA Chase deal system ID number. It’s not nearly as interesting as saying Ironman doesn’t like what Batman is saying but then we’re never going to run out of ‘secret code names’ for our projects, deals and the associated parties.
If you would like professional and discrete advice about a merger or acquisitions you’re considering, whatever it may be called, call our Head of M&A here at AA Chase, Andrew Thomas on 07973 832216.
