French cognac maker Grand Marnier sells for €684m

Davide Campari-Milano, the Italian distiller, agreed to buy French cognac maker Grand Marnier in a deal that values the family-owned company at €684 million, adding more high-end spirits to its portfolio.

Grand Marnier investors will get €8,050 in cash per share, plus a possible payment related to the planned sale of real estate property, Campari said in a statement.

The bid is 60% higher than Friday’s closing price. Campari shares rose as much as 1.8% in Milan, building on Monday’s 5% gain.

“Grand Marnier is a French icon, with a rich 150-year history for which we have profound respect,” Campari chief executive Robert Kunze-Concewitz said.

The acquisition is the first for Campari since 2014, and the biggest since Mr Kunze-Concewitz took the helm in 2007.

The maker of Wild Turkey bourbon and Skyy vodka also entered an agreement to be the worldwide exclusive distributor of Grand Marnier’s spirits, effective in July.

Grand Marnier produces cognac, Armagnac, and wines and gets more than half of its €140m in sales from the US, where young drinkers are ordering more of the classic cocktails once enjoyed by their grandparents.

Campari said the purchase will add to profit immediately on a full-year basis. The Italian company said the price implies an enterprise value that’s 13.7 times Grand Marnier’s adjusted 2015 operating profit.

The Italian company agreed to buy stakes from the Marnier-Lapostolle family shareholders, and if investors don’t tender 50.01% of the company’s stock, the main stakeholders will sell shares and relinquish special voting rights to ensure that Campari gets control.

Trading in Paris-based Grand Marnier’s shares remained halted after being suspended on Monday ahead of the announcement.

Grand Marnier was founded in 1827 by Jean-Baptiste Lapostolle, who started a distillery producing fruit liquors.

Its namesake, orange-flavoured cognac, is often used to make Cosmopolitan cocktails, favoured by singer Madonna.

Campari said it may sell a villa surrounded by botanical gardens that Grand Marnier owns in Saint Jean Cap Ferrat, an exclusive peninsular town east of Nice.

The house, known as Villa les Cedres, was built in the 1800s and acquired by King Leopold II of Belgium in 1904. Louis-Alexandre Marnier-Lapostolle bought the property in the 1920s.