Campari pauses M&A to focus on brand growth amid US tariffs

Reuters

05-03-2025

MILAN, March 5 (Reuters) - Italian spirits group Campari (CPRI.MI), opens new tab plans to put the brakes on M&A and focus on developing its most promising brands as it faces a hit from U.S. tariffs, its new chief executive said.
The decision to effectively pause acquisitions marks a significant shift in the company's investment strategy, which in the past aimed for 50% of its growth to be powered by deals.
"The main reason I've decided to pause M&A for now is our net debt... we need to continue to get that down," Simon Hunt, who took charge in January, told Reuters in a post-results interview.
At the end of last year net debt was around 3.2 times the group's core profit.
"I wouldn't say never, but I'd say for the next couple of years, few years, (the priorities) I see are deleverage, focus on our core portfolio and really optimize the brands that we have already acquired," he added.
Campari's last major deal was the $1.2 billion acquisition of historic French cognac house Courvoisier, completed last year.
The group is in the process of working through a new strategy and assessing which brands it can divest and which ones can expand in new markets, Hunt said, adding it has brands which are big in a few markets and the potential to expand in many other geographies.
Among the brands which are more likely to be sold off are the ones focused on only a single market.
Campari warned on Tuesday of the potential hit from U.S. tariffs in what it said would be a "transitional year" under its new chief executive who took over after his predecessor quit only a few months into the job.
The group is assessing actions to mitigate the U.S. tariffs.
It is still not clear how much of the price increase will be transferred to the end customer, because the price elasticity depends much on what their competitors will do, Hunt said.
The manager added the group is assessing the opportunities to expand its production in the U.S. without losing the essence of its brand portfolio.
"And so there's always a balance with respecting our heritage and then seeing how the environment has changed... What's the best way for us to get them there (to U.S. consumers) at the right price, at the right quality?", Hunt said.