Two Southeastern beer distributors that sell a variety of Anheuser-Busch products are set to combine operations, according to a spokeswoman with the global beer giant.
In an email to Brewbound, Gemma Hart, A-B’s vice president of communications, said the company has granted approval of a merger between Georgia- and South Carolina-based Southern Eagle Distributing and South Carolina’s Crown Beverages.
“Anheuser-Busch is looking forward to working with Will Dorminy and Schipp Johnston, and their newly formed operation which combines Southern Eagle Distributing and Crown Beverages and will service a large portion of our Georgia and South Carolina markets,” she wrote via email. “We are confident that with their combined knowledge, leadership, and expertise, these outstanding wholesalers will continue to provide superior execution in the market and help the region grow.”
Confirmation of the tie-up comes about 10 months after the two wholesalers attempted to facilitate a mega-merger that would have also included another A-B wholesaler, North Carolina’s R.A. Jeffreys Distributing Company.
Under that proposal, a three-state, 30-million case enterprise would have been formed.
In a “notice of disapproval,” Bob Tallet, A-B’s vice president of wholesaler development, said the mega-merger had “numerous disadvantages” for the distribution of A-B brands.
In a letter sent to the owners of all three wholesalers and included in the “Anheuser-Busch, LLC v. R. A. Jeffreys Distributing Company, LLC” lawsuit filed in North Carolina on April 3, Tallet suggested that the merger would have an “adverse effect” on the company’s relationships with “key chain accounts.” He also said the “merged entity would be highly leveraged,” due to the combination of an undisclosed amount of debt.
According to Tallet, A-B has approved of five acquisitions by Southern Eagle and five purchases by R.A. Jeffreys over the last decade. Those moves “dramatically increased” the size of both operations, Tallet noted. Southern Eagle grew from 1.2 million cases to 12.2 million cases as a result of its purchases, while R. A. Jeffreys grew from 3.6 million cases to 16 million cases via its acquisitions.
In August, the three companies agreed to a dismissal, and A-B moved ahead with the approval of Southern Eagle’s purchase of the smaller Crown Beverages, which sells approximately 2.5 million cases of product to 800 customers annually, according to its website.
In her statement, Hart said R.A. Jeffreys was “key” to A-B’s success within North Carolina.
“These two separate operations within the region position us well for the future,” she wrote.