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Campari strengthens premium spirit portfolio with Grand Marnier acquisition

Published:  15 March, 2016

Italy's Gruppo Campari is to acquire the producer of Grand Marnier as part of a friendly takeover which values the business at £537 million.

The all-cash deal represents a 60% premium on the company's current value.

Société des Produits Marnier Lapostolle, which owns Grand Marnier, is listed on the Euronext exchange in Paris and had a market capitalisation of some £335 million as of March 11, 2016.

The acquisition will take place in a number of stages, beginning with Campari taking a 17% stake in the target company.

The deal will complete with the sale of the remaining family shares to Gruppo Campari in 2021.

As part of the transaction, Gruppo Campari will take over exclusive worldwide distribution for the Grand Marnier spirits portfolio as of July 1, when the initial share acquisition is made.

Grand Marnier currently uses a range of distributors around the world, including Moët Hennessy and Diageo.

Gruppo Campari intends to add Grand Marnier to its Global Priorities portfolio, which currently includes its namesake aperitif, SKYY vodka, Wild Turkey whisky, Aperol, and the Appleton Estate Jamaican rums.

SPML was founded in 1827 by Jean-Baptiste Lapostolle.

Grand Marnier, which accounts from some 85% of SPML's sales, was created in 1880 by descendant of the founder, Louis-Alexandre Marnier Lapostolle.

It is a key ingredient in a range of cocktails, including classics such as the Sidecar and the Cosmopolitan.

Aside from Grand Marnier, SPML produces a range of Cognacs an Armagnac and a Pineau de Charentes.

It also produces wines from the Château de Sancerre estate and Chile's Casa Lapostolle.

Around 60% of its sales are in the US and its brands are distributed in 150 countries worldwide.

Annual turnover at the company has been around £115 million for the last five years, with a net profit margin of some 8%.

Gruppo Campari is the sixth largest producer of spirits in the world.

Sales at the company grew 10.5% in the first half of 2015, rising to £533 million.

Under chief executive Bob Kunze-Concewitz, who took over in 2007, it has acquired a range of smaller spirits businesses, most recently Sicilian aperitif Averna.

Some 40% of Campari's revenues come from the US, driven by the explosion of interest in premium spirits and cocktails.

Bob Kunze-Concewitz, chief executive of Campari, said: "Grand Marnier is a French icon, with a rich 150-year history for which we have profound respect. This acquisition represents a perfect fit with our external growth strategy in terms of brand profile, distribution and financial framework.

"With Grand Marnier, we add a premium and distinctive brand to our global priorities portfolio, thus driving richer product mix, and we further consolidate our position as the leading purveyor of premium liqueurs and bitter specialties worldwide.

"Thanks to its exceptional quality and international recognition, Grand Marnier enhances our exposure to the premium on-trade, across all markets, to the benefit of the group's overall portfolio, as well as to Global Travel Retail.

In particular, as a key ingredient in many classic cocktails and a must-have premium brand in classic cocktail bars, Grand Marnier strengthens our quest to further capitalize on the revival of classic cocktails, particularly in the US."