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    Case Study

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

    By Salvatore Cantale and Edwin Wellian
    11 pages
    June 2018
    Order this case study
    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
    Keywords
    Strategy, Business Strategy, Merger and Acquisition Activity, Company Value, Valuation, Trading, Discounted Cash Flow, Globalization, Family Business, Ethics, Marketing, Alcohol, Legislation
    Settings
    World/global, Italy
    Consumer Goods, Food and Beverage
    2014 - 2016
    Type
    Published Sources
    Copyright
    © 2018
    Available Languages
    English
    Related material
    Teaching note
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    This case study is part of a series
    • Campari (A): A cocktail of organic and external growth
    • Campari (B): Buying a blend of family business and orange liqueur
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    Campari (A): A cocktail of organic and external growth
    By Salvatore Cantale and Edwin Wellian
    Case reference: IMD-7-1995 ©2018
    Summary
    When Luca Garavoglia became chairman of the Campari Group at the age of 23 following the death of his father, he immediately adopted a strategy of ...
    Read more
    Reference IMD-7-1995
    Copyright ©2018
    Copyright owner IMD Copyright
    Organization Campari Group
    Industry Consumer Goods, Food and Beverage
    Available Languages English
    Contact

    Research Information & Knowledge Hub for additional information on IMD publications

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    Campari (B): Buying a blend of family business and orange liqueur
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    Case reference: IMD-7-1996 ©2018
    Summary
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    Reference IMD-7-1996
    Copyright ©2018
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    Available Languages English
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    Organization Daikin Industries
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    Available Languages English
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    Case reference: IMD-7-2619 ©2024
    Summary
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    Copyright ©2024
    Copyright owner IMD Copyright
    Organization Daikin Industries
    Industry Consumer Goods, Home Appliances
    Available Languages English
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    Daikin’s success in the Chinese air conditioning market serves as a compelling case study in strategic adaptation and collaboration. Following its entry into the market in the 1990s, Daikin faced formidable competition from well-established domestic brands like Gree and Midea. Despite the initial challenges of breaking through in a fragmented and competitive landscape, Daikin’s innovative inverter technology became a distinguishing feature of its product offerings. The watershed moment in Daikin’s trajectory occurred in 2008 when it formed a strategic partnership with Gree, China’s largest air conditioner manufacturer. This collaboration enabled Daikin to tap into Gree’s expansive distribution network and manufacturing expertise, significantly enhancing its own market reach. The partnership proved mutually beneficial; Gree capitalized on Daikin’s advanced inverter technology while Daikin secured a foothold in a market driven by increasing consumer demand for energy-efficient solutions. By 2012, inverter air conditioners claimed over 60% of the Chinese market share, a figure that surged to over 90% by 2024, illustrating the success of their joint efforts. Furthermore, Daikin’s commitment to sustainability was manifested in its pioneering use of HFC-32 refrigerant, known for its low global warming potential. By openly licensing HFC-32 patents globally, Daikin not only positioned itself as an environmental leader but also fostered industry-wide innovation. This case highlights the critical importance of strategic partnerships and innovation in overcoming competitive challenges and underscores Daikin’s role as a transformative force in the global air conditioning market.
    Reference IMD-7-2620
    Copyright ©2024
    Copyright owner IMD Copyright
    Organization Daikin Industries
    Industry Consumer Goods, Home Appliances
    Available Languages English
    Contact

    Research Information & Knowledge Hub for additional information on IMD publications

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    By Kazuo Ichijo and Yunfei Feng
    Case reference: IMD-7-2618, © 2024
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    By Joep de Caluwé
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    Summary
    Learn why flashy innovation often fails and how a strategic, fact-based approach can drive real innovation success in corporate environments. Insights from industry experts.
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    Learn why flashy innovation often fails and how a strategic, fact-based approach can drive real innovation success in corporate environments. Insights from industry experts. In this final article in a series of three articles, Joep De Caluwé (EMB...
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