Another International Acquisition: London’s Fourpure Brewing Sells to Kirin-Owned Lion

As sales of U.S. craft beer have begun to slow, so too has the appetite for domestic dealmaking.

Over the last three-and-a-half years, dozens of well-known craft breweries were acquired by strategic buyers like Anheuser-Busch InBev, MillerCoors and Constellation Brands, among others. But in 2018, there’s only been one notable U.S. deal: Deep Ellum Brewing Company’s sale to Fireman Capital-backed Canarchy Craft Brewery Collective last month.

More recently, however, there’s been an uptick in the number of international craft acquisitions — including a pair of well-regarded London-based breweries.

Today, London’s Fourpure Brewing Co. announced a 100 percent sale to Australia-headquartered and Kirin-owned Lion Pty Limited.

Financial terms of the deal, which was announced today on Fourpure’s website and social media pages, were not disclosed.

“The Fourpure team has just grown!” the company announced via Twitter. “From today we join the Australian Headquartered Brewing Company, Lion. This is a fantastic opportunity that will see us driving growth here in the UK.”

The announcement of Fourpure’s sale comes nearly three weeks after fellow London-based craft producer Beavertown Brewery sold a minority stake to Heineken International B.V.

Fourpure, which was founded in 2013 by Dan and Tom Lowe, joins a portfolio that includes Australian craft breweries Little Creatures and Malt Shovel Brewery, as well as Panhead Custom Ales and Emerson’s Brewery in New Zealand.

In a blog post on Fourpure’s website, founders Dan and Tom Lowe wrote that they hope change is coming to the brewery that they founded.

“We truly hope that you will see some change, otherwise why would we bother?” they wrote.

However, the Lowes wrote that there “will be no immediate changes to operations so it’s very much business as usual.” Dan Lowe is staying on as CEO while Tom Lowe will also remain involved in the business.

The Lowes added that they spoke with “a broad range of investors,” as well as considered private equity funding, bank debt and crowdfunding, but ultimately determined that selling to Lion was their best option.

“Put simply, it’s a great business with fantastic people, strong sustainability credentials and a lot of expertise we can learn from,” the wrote. “We also think there’s a very good cultural fit and we see a fantastic opportunity to work together to grow both Fourpure and Lion’s suite of craft beers, ciders and fine wines.”

According to the brewery founders, selling to Lion will also give Fourpure “a structure that will allow for growth and progression” as well as financial resources to “invest in capacity, safety, innovation, people, our quality programme, our sensory.” Over the course of the next two years, the company plans to hire 30 additional workers.

The Lowes added that they were “continuously” investing in the business. In fact, the company announced plans in January to invest more than $3 million to expand the capacity at its brewery in Bermondsey. To do so, the company took on a combination of bank debt and asset financing.

“We’ve now reached a point where if we want to reach more people and get them drinking good beer, then we need more resources, equipment, and amazing people,” the Lowes wrote in today’s announcement.

Fourpure, which will be Lion’s only physical manufacturing plant in the U.K., will also be Lion’s “primary focus” in the country.

“[W]e will benefit from all the time, expertise and investment required to succeed, and that means that everything around the brewery will be a little bit easier and a little bit better,” the Lowes wrote.

In January, Fourpure announced it would begin exporting beer to the U.S. for distribution along the East Coast.

Fourpure and Beavertown are just the latest U.K. breweries to sell or take investment in recent years. In 2015, SABMiller acquired Meantime Brewing Co., which less than a year later was sold to Asahi Group Holdings as Anheuser-Busch InBev sought approval of its Megabrew merger with SABMiller.

Over the past three years, A-B’s “global growth and innovation team”, ZX Ventures, has acquired several international beer companies, including London’s Camden Town Brewery, Australia’s 4 Pines and Pirate Life, Columbia’s Cervejaria Colorado, Brazil’s Cervejaria Wäls, Mexico’s Cerveza Bocanegra, Madrid’s Cervezas La Virgen, Belgium’s Brouwerij Bosteels, and Italy’s Birra del Borgo.

In 2017, New York’s Brooklyn Brewery and Carlsberg announced three international joint ventures, including the acquisition of London Fields Brewery in the U.K. for a reported $5.2 million. The two companies also announced tie ups in Lithuania (Švyturys Brewery) and Hong Kong (HK Yau Brewing Company) to bolster previous ventures in Norway (E.C. Dahls Brewery) and Sweden (The New Carnegie Brewery).

Brooklyn, which sold a 24.5 percent minority stake to Kirin Brewery in 2016, also operates South Korea’s Jeju Brewing Company and has minority investments in two U.S. craft breweries — 21st Amendment and Funkwerks.

Also in 2017, Heineken acquired a minority stake in London-based Brixton Brewery. The world’s second largest brewer was active again this year with a minority investment in Belize Brewing Company.

Other international M&A from 2018 includes Pernod Ricard-owned Irish Distillers acquiring Irish craft brewery Eight Degrees Brewing Company, and Constellation Brands forming a joint sales venture with Moa Brewing Co. in New Zealand.

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