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What the Lagunitas/Heineken deal means to the craft brewing industry

September 11, 2015Kyle R. Leingang

Heineken-logo
The impact of the Lagunitas-Heineken transaction (and other international joint ventures) at the bar and in the bottle shop initially may be minimal but will have an important impact on the craft beer industry.

The recently announced transaction between Lagunitas Brewing Co. and Heineken N.V. marks the third transaction over the last 10 months between a major U.S. craft brewery and a large foreign brewery. The prior two transactions were Firestone Walker Brewing Co.’s joint venture with Belgium-based Duvel Moortgat (July 2014) and Founders Brewing Co.’s sale to Mahou San Miguel, the largest Spanish beer company (December 2014).

As discussed in my article last month, joint ventures with large foreign breweries are becoming increasingly popular alternatives to deals with AB InBev or MillerCoors, for reasons that include the following:

  • As shown by the Lagunitas-Heineken deal, large foreign brewing companies are increasingly considering strategic investments in U.S. craft breweries as a way to direct funds into a growing market segment and as a way to diversify their business.
  • These transactions have the potential to open up international distribution opportunities for U.S. craft breweries without compromising existing production plans or disturbing U.S. distribution channels (subject, of course, to the terms of existing contracts and obtaining any required consents thereunder).
  • The joint venture can be structured as a cash sale of a portion of the craft brewery’s equity (often with a post-closing contractual arrangement concerning management, distribution, etc.) or an exchange of craft brewery equity for stock in the acquiring company, depending on the legal and financial needs of the parties.
  • The reaction among craft beer drinkers to these transactions has been less negative than to similar transactions involving AB InBev or MillerCoors. This allows a U.S. craft brewery to increase its resources and begin distributing to a larger audience, without sacrificing the allegiance of their core demographic.

The impact of the Lagunitas-Heineken transaction (and other international joint ventures) at the bar and in the bottle shop initially may be minimal but will have an important impact on the craft beer industry, including by raising its profile globally and allowing U.S. craft breweries to tap into a pool of resources previously allocated exclusively to worldwide production of light lagers. Others of this kind are on their way.

Leingang Kyle craft beer transactionsKyle Leingang is a corporate attorney in the Southern California office of Dorsey & Whitney, LLP. Kyle’s law practice includes representing craft breweries and investors in M&A and financing transactions, including ESOPs. Kyle is also a certified BJCP judge and avid homebrewer. Kyle can be reached at [email protected].

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Reader Interactions

Comments

  1. theredrose24 says

    September 18, 2015 at 2:26 pm

    Heinken Deal always good. no1 deal

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  2. Karli Olsen says

    September 15, 2015 at 8:51 pm

    Karli Olsen liked this on Facebook.

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  3. KCHopTalk says

    September 12, 2015 at 6:17 pm

    What the Lagunitas/Heineken deal means to the craft brewing industry http://t.co/52OhA9dKpF

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  4. Ryan Godwin says

    September 12, 2015 at 6:06 pm

    Ryan Godwin liked this on Facebook.

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  5. Cizauskas says

    September 12, 2015 at 10:50 am

    After Heinken/Lagunitas, why more foreign breweries will be buying American ‘craft’ breweries. Via @craftbrewingbiz: http://t.co/5ngRODhRCM

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  6. USbevX says

    September 11, 2015 at 5:53 pm

    What the Lagunitas/Heineken deal means to the craft brewing industry http://t.co/d8r2tOWz9L

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  7. Serge Lubomudrov says

    September 11, 2015 at 5:51 pm

    Serge Lubomudrov liked this on Facebook.

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  8. Sean Barnett says

    September 11, 2015 at 5:51 pm

    Sean Barnett liked this on Facebook.

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  9. Raúl Daza says

    September 11, 2015 at 2:41 pm

    In Colombia, recently a similar move took place when a craft beer company (Bogota Beer Company) was acquired by Inbev.

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  10. LVRGLLC says

    September 11, 2015 at 2:16 pm

    #CraftBeer #CraftBrewing #Beer #BeerBiz What the Lagunitas/Heineken deal means to the craft brewing industry http://t.co/q5nfvACIcJ

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Trackbacks

  1. Clamps & Gaskets: News Roundup for Weeks 36/37, 2015 - The Virginia Beer Trail says:
    September 22, 2015 at 8:36 am

    […] 11 September 2015 After Heineken/Lagunitas, why more large foreign breweries will be buying American ‘craft’ breweries. —Via Craft Brewing Business. […]

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  2. What the Lagunitas/Heineken deal means to the craft brewing industry - BeerRun Software says:
    September 16, 2015 at 2:50 pm

    […] Read more […]

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