Mergers & Acquisitions Investors Would Love to See: Brown-Forman (BF.B) and Davide Campari-Milano (DVDCY)
Buyer: Brown-Forman Corporation (NYSE:BF.B)
Seller: Davide Campari-Milano SpA (ADR) (OTCMKTS:DVDCY)
Previously, I suggested that it would be a good move for Brown-Forman to acquire Boston Beer Company Inc (NYSE:SAM) because the craft beer maker’s stock is cheap and it could go on a bit of a buying binge in the craft category — and not just beer.
However, its heritage is in spirits, so a better move might be to fill some holes in its lineup by buying Davide Campari-Milano, the Italian liquor company whose biggest brand is Wild Turkey, something Brown-Forman doesn’t need.
What Campari does have that Brown-Forman doesn’t is a strong rum brand in Appleton Estate; Glen Grant, the world’s fifth-best selling Single Malt Scotch Whisky; and Cabo Wabo, Sammy Hagar’s former tequila brand.
Of the three names, Appleton is the key to any acquisition. It would also be interesting to see what it could get for Wild Turkey and some of the other brands owned by Campari.
If Brown-Forman wants to be in the big leagues when it comes to brown spirits, it has got to have a top-notch rum brand. Appleton is that.