After initially choosing not to purchase the remaining shares of the Craft Brew Alliance, Anheuser-Busch InBev has changed its mind, agreeing to purchase the remaining CBA shares it does not already own. The global beer behemoth currently owns a 31.2 percent stake in CBA and has offered $16.50 in cash for the remaining shares.
“Today’s announcement represents an exciting next step in a long and successful partnership with Anheuser-Busch, whose support for the growth of our business and brands traces back over 25 years,” said Andy Thomas, CEO of CBA. “By combining our resources, our talented teammates, and dynamic brands, we will look to nurture the growth of CBA’s existing portfolio as we continue investing in innovation to meet the changing needs of today’s beverage consumers, all while delivering certainty of value to our shareholders.”
The CBA consists of Kona Brewing (its biggest asset by far), Redhook Brewing, Widmer Bros., Omission, Appalachian Mountain Brewing, Cisco Brewers, Wynwood Brewing, Square Mile Cider and pH Experiment.
What’s changed? Well, the price for one. In August, A-B would have paid a predetermined price of $24.50 per share (close to $500 million) versus the $20 million fee to decline the purchase. Hilariously (or diabolically?), that initial decision to decline the purchase drove the share price down. As OreonLive notes:
At the time CBA’s shares were trading around $13 and Anheuser-Busch opted not to move forward. The stock faded after the St. Louis company walked away and closed Monday at just $7.33 a share.
What does this mean for CBA?
More of A-B’s mighty resources. Sure, the vast majority of CBA’s brands are already distributed through A-B’s network of wholesalers, but this transaction will move CBA fully into A-B’s Brewers Collective portfolio. In the last three years alone, A-B has invested more than $130 million in this roster of formerly independent breweries, allowing them to expand their production volume by an average of 31 percent post acquisition (the most recent addition prior to this was Cleveland’s Platform Beer Co). A-B says its Brewers Collective portfolio brands have added 1,000 new jobs total since being acquired.
“Anheuser-Busch has a long track record of working with its craft partners to help make the U.S. beer category stronger and more vibrant,” said Michel Doukeris, CEO of Anheuser-Busch. “Our partnership with CBA goes back many years and we look forward to supporting CBA as they continue to bring great products to beer drinkers across the U.S.”
The transaction is subject to customary closing conditions, including approval by a majority of CBA’s shareholders not affiliated with A-B and certain regulatory approvals. The transaction is expected to close in 2020.