Pabst, Molson Coors Agree to Sale of California Brewery

Molson Coors Beverage Company’s Irwindale, California, brewery will have a new owner by year’s end as Pabst Brewing Company has exercised its option to purchase the facility, according to a Form 8-K Molson Coors filed with the U.S. Securities and Exchange Commission yesterday and posted to the company’s website today.

“We have given notice to Molson Coors of our intention to purchase the Irwindale Brewery property,” Pabst CEO and chairman Eugene Kashper said. “We continue to evaluate this opportunity and are committed to choosing a path forward that is in the best interest of all our stakeholders.”

In January, Molson Coors announced plans to cease production at the 40-year-old brewery, effective September 2020. As part of an agreement, Pabst had 120 days to choose to buy the facility for $150 million.

This arrangement followed a lawsuit between the two brewers, two of the country’s largest, which Pabst filed over a nearly two-decades-old contract brewing agreement. iPabst and Molson Coors reached a settlement in the case in November 2018.

During the trial for that lawsuit, Kashper testified that Pabst offered to purchase Molson Coors’ now-shuttered Eden, North Carolina, facility for $100 million, to which Molson Coors made a counteroffer of $750 million. Kashper declined, and Molson Coors went on to sell the brewery for $2.75 million in 2018.

When Molson Coors ceases production in Irwindale, the 4.8 million barrels the brewery produced will shift to the company’s facilities in Golden, Colorado ,and Fort Worth, Texas. Last year, the Irwindale brewery employed 470 people and shipped beer to 261 independently owned wholesalers.

Last November, Pabst entered into an agreement with contract brewer City Brewing Company to produce the company’s beers and other beverages until 2040. It is not yet known how the purchase of the Irwindale brewery will affect that contract. In 2019, Pabst ranked as the fifth largest brewing company, a distinction it also held in 2018, according to national trade group the Brewers Association. Production numbers for 2019 have yet to be released, but in 2018, the company shipped 4.5 million barrels.

Pabst’s brands include legacy offerings such as Pabst Blue Ribbon, Lone Star, Schlitz, Old Milwaukee and others.

This story was updated at 7:08 p.m. to include a statement from Pabst CEO Eugene Kashper.

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