Goose Island Acquired By Anheuser-Busch


This morning, beer giant Anheuser-Busch acquired the Chicago-based craft brewery Goose Island Beer Co. When all said and done, the deal is worth $38.8 million.

Goose Island’s legal name is Fulton Street Brewery LLC (FSB). Anheuser-Busch reached an agreement to purchase the majority (58 percent) equity stake in FSB from its founders and investors, held in Goose Holdings Inc. (GHI), for $22.5 million.

Craft Brewers Alliance Inc. (CBA), an independent, publicly traded brewer based in Portland, Ore., that operates Widmer Brothers, Redhook and Kona breweries, owns the remaining 42 percent of FSB and reached an agreement in principle to sell its stake in FSB to Anheuser-Busch for $16.3 million in cash. Anheuser-Busch holds a minority stake (32.25 percent) in CBA.

Talks between Anheuser-Busch and Goose Island began a few months back when it became known that the Chicago brewery was looking for investors to expand their already growing business, according to Dave Peacock, president of Anheuser-Busch.

I think by virtue of our needs to expand and improve our position in the high end and their needs for capital, we started to have the dialogue,” said Peacock. “I don’t think they expected us to inquire nor did we think that we would move down that path. It was just a meeting of the minds that moved pretty quickly.”

News of the acquisition traveled across the internet even more quickly than the consummation of the deal itself. Craft Beer blogs were posting press releases, and social media outlets were on fire with rumors and speculation on the announcement. At one point both Anheuser-Busch and Goose Island were trending topics on Twitter.

Some fans of Goose Island were in shock and many even claimed they would never purchase the brand again. To that point Peacock commented:

“I think it is unfortunate for them. If they liked it before, the beer is the same. The story and the heritage are there. The reasons things that matter and the reasons why people buy beer are still intact,” Peacock said.

Maintaining the quality and consistency of the Goose Island product will be a focal point, Peacock said. That may involve changes in the supply chain, however.

“I don’t think it (the quality) will be affected in the short term, but in the long term obviously there will be a collective view toward purchasing,” he said. “In doing so we want to make sure we adhere to the quality and consistency of their product. Our desire is not to change one thing about the taste of the beers that they make. If there is a specific hop variety that is important, then we are going to maintain that.”

In addition to the purchase, Anheuser-Busch plans to invest $1.3 million into improving the current Goose Island facility. Peacock believes this will add an additional ten percent to the current facility’s capacity.

As Goose Island has grown, that capacity has been a key issue for the brand in recent years; Goose Island first gave up manufacturing a line of craft sodas at its facility, and in February began to use a New Hampshire-based Red Hook facility to fuel some of its East Coast growth.

The Red Hook facility is owned by CBA, which is expected to continue brewing the outsourced beer over the three year period specified in the agreement made last September between CBA and Goose Island.

The CEO of CBA, Terry Michaelson released this written statement to Brewbound:

“As an independent craft brewer, CBA continues to be 100 percent committed to brewing authentic craft beers and growing our Widmer Brothers, Redhook and Kona brands, and is energized about the new initiatives it continues to bring to the craft beer market through these brands. The five year sales, marketing, and brewing relationship CBA has had with Goose Island has been mutually beneficial, and we wish them well in the next phase of their company with AB InBev.

CBA’s ability to invest in brewing authentic craft beers, building our brands, and supporting our people continues to be paramount. While we would have liked to include Goose Island fully in CBA’s independent family of craft brands, we could not match the terms of AB InBev’s offer for Goose Island while continuing to invest optimally against our key objectives. AB InBev’s offer of a combination $16 million in cash and a significant reduction in fees ongoing will allow us to strongly support those objectives. CBA will continue to honor the brewing agreement to brew key Goose Island beers in CBA’s Portsmouth brewery for the next three years.”

As part of the buyout from CBA, Anheuser-Busch has also agreed to lower the cost of fees associated with the distribution of the remaining CBA brands to 0.25 cents per case. In addition, there is a ceiling on distribution fees at 0.75 cents per case if they re-negotiate terms.

The two Goose Island brew pubs are not part of the deal, but will continue in operation, offering consumers an opportunity to sample Goose Island’s award-winning specialty beers and food selections.

In addition, The Goose Island line of soda’s which is under the ownership of WIT, appears as if it will not be affected in the short term. News on this can be found on

Also being included in the conversation is Maryland craft brewer Terrapin Beer Co., who has been rumored to have accepted an investment from the MillerCoors brand Tenth and Blake Beer Co. President and Co-Founder of Terrapin, John Cochran, confirmed that it was in fact a loan, not an investment that they took from Tenth and Blake Beer Co.

“We had an investment group that had a different opinion on how to operate,” he said. “We wanted to grow and put more money back into the brewery and they were more interested in getting their capital return.”

While Cochran would not speak directly about his future plans for the brewery he did speculate on the craft beer industry as a whole and the possibility of more buyouts from other brands.

“When some of these brands started, it might have been fun just to make beer and they weren’t thinking about exit strategies,” he said. “Some of the guys have been around since the 1980’s and you might see them doing more and more of this.”

Cochran maintained that even after nine years, he along with Co-Founder Brian “Spike” Buckowski plan on being a part of the business for at least the next 30 years.

As for Goose Island, Founder John Hall will stay on board as the CEO and is optimistic about the acquisition.

“I am more excited than ever about Goose Island’s future. With the support and financial backing of our new partner, we will continue to brew our authentic classic styles, develop new amazing beers, and serve our drinkers,” he said.

The current Brewmaster, Greg Hall, will be stepping down and Brett Porter from their Fulton Street Brewery has been appointed. Porter also was with Deschutes in Bend, OR for five years.

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