Campari Group has reached an agreement to sell Cinzano vermouth and sparkling wines to the private Italian spirits company Caffo Group 1915, the owner of the bitter brand Vecchio Amaro del Capo. The €100m deal also includes Frattina grappa and sparkling wine business.
The transaction marks a significant development in Campari Group’s strategy and commitment to portfolio streamlining via disposal of non-core brands to enhance commercial and marketing focus on core spirits business, overall operational simplification and financial deleverage.
Simon Hunt, CEO, Campari Groupm said: “The sale of Cinzano vermouth and sparkling wines and Frattina businesses marks a key step in our strategy of streamlining our portfolio via disposals, allowing us to increase our commercial and marketing focus on our key core brands. We are very pleased to execute this transaction with Caffo Group 1915, a focused player in alcoholic beverages with strong international ambition, hence the best fit for the future development of these brands.”
Sebastiano Caffo, CEO, Caffo Group 1915, said: “Today’s acquisition is an important step in our international growth journey. Following the strong success we have recorded in Italy with Vecchio Amaro del Capo, market leader in its category, we have strengthened our position in the domestic market but we still have room for growth and a long journey ahead in international markets.
“Cinzano, a historic and iconic brand, will be pivotal to accelerate our international expansion, expanding immediately our footprint in more than 100 markets. We believe that our long-standing experience in alcoholic beverages and our consolidated and far-reaching sales network will enable us to fully exploit the brands potential, starting with their relaunch in Italy.
“I would like to thank Campari Group for this opportunity and for the temporary support that will allow a proper transition in certain international markets where we are not yet present.”
The transaction foresees the contribution to a newly established company (‘NewCo’) of the Cinzano and Frattina businesses including all intellectual property, finished goods inventories, certain employees, some production equipment in Italy, contractual relationships as well as other related assets. The production facilities in Italy and Argentina, where Campari Group also manufactures other brands, are excluded from the transaction perimeter.
As part of the transaction and effective from closing, Caffo Group 1915 and Campari Group will enter into a transitional manufacturing agreement in Italy and Argentina as well as temporary distribution agreements whereby Campari Group will continue to distribute Cinzano products in certain markets such as Argentina, Spain, Mexico, Russia, South Korea and South Africa before transitioning to Caffo Group 1915’s commercial footprint.
Founded in 1757, Cinzano was acquired by Campari in 1999 while Frattina entered the Group’s portfolio through the acquisition of Fratelli Averna S.p.A. in 2014.