Craft Beer Mergers And Acquisitions

Over the past several months, 15 notable deals have taken place in the craft beer space, continuing a trend toward consolidation in the industry. While the terms of most transactions remain undisclosed, the deals generally fall into three buckets: 1) strategic deals designed to combine leading brands and brewers and leverage distribution capacity, 2) targeted asset acquisitions designed primarily to expand brewing capacity, and 3) restructuring transactions.

STRATEGIC DEALS

Dogfish Head, Boston Beer Merge

The blockbuster deal of 2019 was the $300 million merger of Dogfish Head and Boston Beer. The deal combines two of the most creative and independent brewers in the craft space, as well as some of the most well-known craft brands. According to a statement from Sam and Mariah Calagione, founders of Dogfish Head, "More than a dozen of our peers have sold to international conglomerates, while others have come together through platforms bringing a handful of craft breweries together in roll-ups. While neither of those strategies appealed to us, we did realize that Dogfish Head would be a stronger company with the support of our friends at Boston Beer, and vice-versa."

The combined company remains a craft brewer pursuant to the Brewers Association's definition. Sam Calagione, now the second largest individual shareholder of Boston Beer, is expected to join the Boston Beer board of directors in 2020.

Craft Brewers Alliance Acquisitions

On October 10, 2018, Craft Brewers Alliance (CBA), the publicly traded Oregon-based brewing group, announced the acquisition of Cisco Brewers, Wynwood Brewing Company, and Appalachian Mountain Brewery, adding their popular brands (and assets) to its portfolio. CBA had previously served as the master distributor for all three brands.

The largest of the three targets was Cisco Brewers. Founded as a winery on Nantucket in 1981, Cisco began brewing in 1995 and remains the only brewery on the island. The structure of the transaction, with an announced value of $23 million, resulted in CBA owning the Cisco Brewers brand, while leaving Cisco's brewpub properties and retail merchandising, including the original brewery in Nantucket, in the hands of the five Cisco Brewers partners.

In addition to Cisco, CBA acquired Miamibased Wynwood Brewing Company, founded in 2013 by Luis Brignoni. Wynwood became a wholly owned subsidiary of CBA but will continue to be managed independently. The purchase price was not disclosed.

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