Premium spirits company Beam Suntory has entered into an exclusive agreement for the proposed sale of Courvoisier Cognac and related assets to Campari Group, for an enterprise value of US$1.32 billion.
This consists of a fixed price of US$1.2 billion and earn-out of US$0.12 billion payable in 2029 on the achievements of net sales targets from FY2028.
Courvoisier net sales were US$249 million in 2022, 60% of which came from the US (led by its VS offering), followed by the UK and China as the largest markets, accounting for around 25% combined. Travel retail represented just over 3% of net sales last year.
Cognac will become the fourth major leg of Campari Group along with aperitifs, bourbon and tequila. It represents the largest deal in Campari Group’s history, enabling it to make a significant step up in its US presence, adding long-term “transformational potential” in strategic Asia and travel retail via expansion of its luxury footprint.
Commenting on the Cognac market today, Campari Group said in a statement:
“Cognac remains one of the spirits industry’s most successful categories. Despite current cyclical trends driven by consumption normalisation, after pandemic-induced very strong growth, negative short-term trends have been further amplified by inflation-related price increases which have led to destocking in core regions.
“However, the long-term prospect of the category remains positive given structural premiumisation trends in the US, China and travel retail. Within the US, premiumisation across the spirits industry and particularly within brown spirits remains, while supporting demographic and macro trends point to a recovery in 2024. Within China, international spirits are growing in popularity, particularly among the younger demographic, especially penetrating major tier one cities while premiumisation remains.”
Campari Group CEO Bob Kunze-Concewitz said: “We are very pleased to acquire a top four historical cognac house, Courvoisier with great latent equity and highly acclaimed expressions. The addition of Courvoisier Cognac to our portfolio of global priorities is a rare and unique opportunity to expand our premium spirits portfolio and Cognac offering.
“By leveraging our heavy Cognac expertise at Board and Executive Team level, Campari Group has a fantastic opportunity to reinforce this brand’s credentials as a global icon of luxury, priming cognac to become Campari Group’s fourth major leg along with aperitifs, bourbon and tequila.
“We are looking forward to accelerating our premiumisation journey, further enriching our RARE portfolio, the division created to unlock and accelerate the growth potential of a select range of high-end individual expressions in our core premium spirits markets.”
“We are proud to have nurtured the iconic Courvoisier brand for nearly 20 years, investing in its growth across key global markets and transforming it into a symbol of modern luxury and an industry leader in awards and sustainability,” said Beam Suntory President and CEO Greg Hughes.
“The brand is very well positioned for its next chapter of growth, and we are confident that Campari would be the right partner to take Courvoisier into the future. This move would allow us to further focus our portfolio on our core areas of strength as we accelerate our global growth ambitions.”
Hughes added: “As part of our company, Courvoisier has reached new heights, growing successfully in key global markets, most notably in the US, China, the UK, Global Travel Retail and South Africa.”
Under the terms of the agreement, Campari Group would assume full ownership of Courvoisier, including properties and operations in Jarnac, France, intellectual property, maturing inventory and case finished goods, and would distill, age and bottle Courvoisier. Pending employee consultations, and other regulatory approvals, the transaction is expected to close in 2024, subject to customary closing conditions. ✈
