Anheuser-Busch Acquires Remaining Stake in Kona Maker Craft Brew Alliance

Anheuser-Busch InBev and Craft Brew Alliance (CBA) announced today that the world’s largest beer company will acquire the remaining 68.8% of CBA that it did not own for $16.50 per share in cash.

The deal is expected to close in 2020, subject to customary closing conditions, including approval of the CBA shareholders unaffiliated with A-B and regulatory approvals.

At the close of trading Monday, CBA stock (BREW) was valued at $7.33 per share. However, in after hours trading, the stock jumped to more than $16 per share.

“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,” Andy Thomas, the CEO of CBA, said in a press release.

“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.,” Anheuser-Busch CEO Michel Doukeris added in the release.

CBA brand’s include Kona Brewing, Widmer Brothers, Redhook, Omission, Square Mile Cider, Wynwood Brewing, Cisco Brewers and Appalachian Mountain Brewery, as well as the pH Experiment. The portfolio of brands will join A-B’s craft division, the Brewers Collective, which includes acquired brands such as Goose Island, Elysian, 10 Barrel, Golden Road, and Wicked Weed, among others.

The new deal between A-B and CBA comes three months after A-B declined to make a qualifying offer to purchase the remaining stake in CBA for a minimum of $24.50 per share. Instead, A-B paid CBA a one-time fee of $20 million.

CBA was free to explore other options after the August 23. However, a merger with A-B still made the most sense as CBA’s route to market is closely aligned with A-B through brewing, distribution and export contracts.

CBA will maintain its scheduled third-quarter financial earnings report, which will go out after the end of trading on Tuesday, November 12, and earnings call with investors and analysts on Wednesday, November 13.

In 2018, CBA’s production hit 756,959 barrels, down about 1% from 2017 levels, according to the Brewers Association. However, the Kona brand alone in 2019 is pacing at 500,000 barrels.

Also last year, production of Anheuser-Busch InBev’s 11 craft brands combined grew 1 percent, as seven of the world’s largest beer manufacturer’s craft brands are now above the 100,000-barrel threshold, the BA reported.

A-B’s two largest craft brands — Goose Island (550,000 barrels) and Shock Top (430,000 barrels) — declined 7 percent and 23 percent, respectively. Seattle-based Elysian Brewing Company continued to expand, growing 38 percent, to 220,000 barrels. Three other A-B craft brands crossed the 100,000-barrel mark last year, including 10 Barrel Brewing (100,000 barrels), Four Peaks Brewing (100,000 barrels) and Golden Road (160,000 barrels). Other brands have either already hit that milestone (Karbach Brewing at 125,000 barrels) or are closing in on it (Breckenridge Brewery at 95,000 barrels and Blue Point at 90,000 barrels).

Earlier this year, A-B acquired Cleveland’s Platform Beer Co.

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