Case Study

Campari (B): Buying a blend of family business and orange liqueur

11 pages
June 2018
Reference: IMD-7-1996

At the age of 23, Luca Garavoglia became chairman of the Campari Group following the sudden death of his father two years earlier in 1992. From the start, Luca adopted a strategy of fast growth through acquisitions and over the next 24 years, Campari acquired 26 other companies, spending a total of over €3 billion and establishing its own distribution network in 20 countries. This two-part case series describes how Campari transformed from a single-brand local Italian company to an important player in the global spirits industry with over 50 premium brands distributed in over 190 countries around the world. CASE B starts with the announcement of a friendly tender offer by Campari for Grand Marnier in March 2016. This was the largest acquisition in the 156 years of Campari’s existence and also one of its most complex ones. It took Campari over 18 months to arrive at this point and it had to wait another month to find out how this offer would be received by the shareholders of Grand Marnier and Campari. Calculating the offer price was Campari’s biggest challenge. With no business plan, and no equity research financial forecasts available, it had to make its own projections based on its business knowledge of the spirits industry.

Learning Objective
  • Valuate and determining a purchase price to satisfy family members, shareholders and analysts
  • Backed by financial details, comparable acquisitions, prices paid and background about the deal structure, calculate the enterprise value using different valuation methods, such as:
    • Trading multiples of comparable companies
    • Comparable M&A transactions
    • Discounted cash flows
Business Strategy, Merger and Acquisition Activity, Company Value, Valuation, Trading, Discounted Cash Flow, Globalization, Ethics, Alcohol, Legislation
Global, Italy
Consumer Goods, Food and Beverage
2014 - 2016
Published Sources
© 2018
Available Languages
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Teaching note
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