Substantial Transaction in the "Thin" Area of Alcohol Producers

The slender figure goes hand in hand with thrift, even when raising a glass. When it comes to the producers of fine liquids within those glasses, the expenses are enormous. The Italian spirits group Campari has announced the acquisition of the famous French house Courvoisier, one of the most prestigious cognac brands globally, from Beam Suntory, with the transaction valued at $1.2 billion, according to Reuters. This is the largest acquisition to date for the Italian group and marks its entry into the cognac segment. Campari, aiming to become a significant rival to giants Diageo and Pernod Ricard, stated that, following the transaction, cognac becomes the fourth major part of the group, alongside alcohol-based aperitifs, bourbon, and tequila. Campari's portfolio also includes the Grand Marnier brand. The directors of the Italian group believe that the transaction will allow Campari to expand in the American market and offers transformation potential in the Asia Pacific region, especially in China. "We are delighted to acquire a renowned cognac house; it is a rare opportunity to expand our premium beverage portfolio and production in France," said Campari CEO Bob Kunze-Concewitz, who will resign next year. Increasing market share in the United States and China-both crucial markets, where Campari currently has a relatively small presence-is critical for the company to better compete with its rivals. Additionally, the transaction is expected to increase Campari's net sales by approximately 9%, Kunze-Concewitz stated. He added that initially, Campari will seek to relaunch Courvoisier, established in 1828, a strategy the group has successfully employed when acquiring other brands. In the fiscal year ending October 31, 2023, Courvoisier's sales declined by 33% annually. Despite this decline, the brand, as indicated by the transaction, remains highly valued.