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Campari Spends $1.2 Billion to Add Premium Courvoisier Cognac to Growing Portfolio

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Dec 15, 2023

Campari Acquires Historic Courvoisier Brand from Beam Suntory

Italian spirits giant Campari has agreed to purchase luxury cognac maker Courvoisier from Beam Suntory for $1.2 billion, marking one of Campari’s largest deals in recent years.

Acquisition Bolsters Campari’s Premium Offerings

The acquisition provides Campari a highly recognized premium spirit brand to add to its portfolio as it continues expanding beyond its signature red aperitifs. Courvoisier, founded by Napoleon’s leading supplier of fine cognac in the early 1800s, is one of the world’s top selling cognac producers with global distribution.

Campari aims to leverage Courvoisier’s heritage and brand awareness to elevate its premium profile and capitalize on rising demand for high-end spirits. Premiumization has been a key strategic focus across the industry, and cognac in particular has attracted strong interest from major alcohol companies.

Campari CEO Bob Kunze-Concewitz framed the deal as a landmark move for the company: “We are truly delighted to be adding such an iconic premium spirit brand such as Courvoisier cognac to our portfolio…This represents a key milestone in Campari Group’s growth journey.”

Deal Commands Record Valuation for a Cognac Brand

At a $1.2 billion price tag, Campari is paying over 17 times Courvoisier’s estimated 2022 earnings to obtain the 150+ year old brand. This is the highest valuation multiple ever achieved for a cognac, demonstrating the surging desirability of the category.

The deal is anticipated to boost Campari’s position in the critical U.S. market, where rising high-end cognac sales have fueled Courvoisier’s growth. As U.S. demand accelerates, Courvoisier has expanded distribution and gained share in a premium segment dominated by large cognac houses like Hennessy.

Campari also aims to increase Courvoisier’s relatively small presence across the company’s home base in Southern Europe. Further international expansion opportunities in Asia and emerging markets are expected to reinforce Courvoisier as a global leader.

Divestiture Continues Beam Suntory’s Portfolio Streamlining

For Beam Suntory, owner of icons like Jim Beam bourbon and Japanese whiskies Yamazaki and Hakushu, selling Courvoisier furthers efforts to refine its sprawling liquor cabinet. Despite Courvoisier’s strong results, Beam is looking to redirect resources towards its bourbon, scotch and Japanese whisky portfolios.

Unloading non-core assets also provides Beam with cash to pay down debt, an increasing imperative in an environment of rising interest rates and economic uncertainty impacting the alcohol market.

While Beam CEO Albert Baladi deemed cognac an attractive category, he conveyed the company’s strategic decision to focus investments on other higher priority areas with more direct connection to Beam Suntory’s brand building expertise.

The sale follows Beam’s recent divestitures of Canadian Club whisky and Pinnacle vodka, though the company retains leading cognac brand Laphroaig as part of its scotch portfolio following this deal.

Key Details of Campari’s Acquisition of Courvoisier

Detail Description
Acquiring Company Campari
Target Company Courvoisier (owned by Beam Suntory)
HQ Locations Campari: Italy
Courvoisier: France
Category Premium Cognac
Price Paid $1.2 billion
Valuation Multiple Over 17x Courvoisier’s estimated 2022 EBITDA
Expected Closing Early 2023

Deal Cleared by Regulators Amid Growing M&A Activity

With the agreement finalized in mid December 2023 following advanced talks, Campari officially gained ownership of Courvoisier after receiving clearance from antitrust regulators.

The deal comes during a wave of alcohol industry M&A fueled by strong demand trends, as liquor players vie for distinctive brands offering pricing power and growth potential. Global cognac leader Hennessy was acquired for $33 billion in 2021, while recent beverage transactions include Heineken purchasing craft brewer Brixton and Pernod Ricard adding bourbon brand Rabbit Hole.

The transaction is expected to close in early 2023, at which point integration planning will accelerate. Both Campari and Beam Suntory expressed confidence that the cognac’s rich legacy provides a solid foundation for driving continued innovation and unlocking Courvoisier’s future potential under new ownership.

Outlook: Elevating Cognac Positioning with Focus on Quality and Heritage

Looking ahead, Campari seems intent on upholding Courvoisier’s premium image through a focus on product quality, craftsmanship and heritage — leveraging the brand’s strong consumer perceptions and renowned history supplying Napoleon’s court.

While cognac faces potential economic headwinds, its cachet as an aspirational spirit is enduring, and Campari aims to nurture Courvoisier’s esteemed reputation for sophisticated cognac offerings. With support from Campari’s expertise building global premium spirits success stories, Courvoisier appears well-poised to raise its international profile further across high-end retail channels and on-premise locations.

The deal consummates a milestone for Italy’s leading purveyor of iconic bitters and rising star across categories like rum, bourbon and tequila. By adding one of the world’s most cherished cognac distillers to its expanding stable of brands, Campari reinforces its strategy of elevating its portfolio quality and positioning to match lofty growth ambitions.

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By AiBot

AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

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