Anheuser-Busch Declines to Purchase Craft Brew Alliance

CBA Management to Host Conference Call September 5th to Discuss 2019 Business Outlook

Anheuser-Busch (AB/InBev) has declined to purchase the Craft Brew Alliance, Inc., a deal that’s been predicted for years. Anheuser-Busch owns a minority 32% stake in the Portland company that includes Widmer Brothers Brewing, Redhook Brewing and Kona Brewing, among others. AB made an agreement with CBA in 2016 that they would purchase the entire company or pay a $20 million penalty fee by August 24th, 2019. Today, they announced they would pay the $20 million (chump change to them) rather than around $475 million to purchase the entire company.

The potential sale of CBA likely hinged on Kona Brewing, the bright spot in the CBA portfolio and the only brewery among them still experiencing significant growth. But with Widmer Brothers and the Redhook Brewery dragging down the whole company, AB may have decided it wasn’t worth it.

Analysts expected the deal to go through, with Kona Brewing among the fastest growing breweries in the U.S. there was a lot of potential. However, Widmer is down and recently even closed their brewpub, while Redhook is on life support with just the Seattle brewpub keeping innovation alive. AB seems to be a fan of the chain brewpub strategy, opening locations in major markets with their own restaurants and small breweries (see 10 Barrel Brewing), and CBA doesn’t have that. It’s always seemed strange that CBA has not opened any Kona Brewing locations outside of Hawaii; perhaps with the new $20 million in their pockets, they will do so.

CBA’s existing Master Distribution Agreement with Anheuser-Busch remains intact through 2028, and the existing Contract Brewing Agreement and International Distribution Agreement remain intact through 2026.

Chief Executive Officer Andy Thomas said, “While disappointing, with this decision made, management can turn its attention to refining strategic alternatives to maximize shareholder value. Over the past several years, we have built a sustainable infrastructure, optimized our footprint, and amassed a diversified portfolio of brands to support future profitable growth anchored by robust growth in the Kona brand and the addition of our three newly acquired brands. Looking to the future, we are optimistic that our healthy balance sheet, bolstered by the $20 million payment, and strategic investments in innovation and increased brand awareness will enable us to deliver long-term shareholder value. We look forward to sharing more details of our growth plan in the coming weeks.”

CBA will host a conference call on Thursday, September 5, 2019 to provide an update on the Company’s go-forward business strategy and full-year 2019 financial outlook. Interested parties may access details for the live conference on CBA’s Investor Relations site at www.craftbrew.com.

About Craft Brew Alliance 
Craft Brew Alliance (CBA) is a leading craft brewing company that brews, brands, and brings to market world-class American craft beers.

Our distinctive portfolio combines the power of Kona Brewing Company, a dynamic, fast-growing national craft beer brand, with strong regional breweries and innovative lifestyle brands: Appalachian Mountain Brewery, Cisco Brewers, Omission Brewing Co., Redhook Brewery, Square Mile Cider Co., Widmer Brothers Brewing, and Wynwood Brewing Co. CBA nurtures the growth and development of its brands in today’s increasingly competitive beer market through our state-of-the-art brewing and distribution capability, integrated sales and marketing infrastructure, and strong focus on partnerships, local community and sustainability.

Formed in 2008, CBA is headquartered in Portland, Oregon and operates breweries and brewpubs across the U.S. CBA beers are available in all 50 U.S. states and 30 different countries around the world. For more information about CBA and our brands, please visit www.craftbrew.com.

Samurai Artist
Samurai Artist

Founder of The New School and most frequent contributor Ezra Johnson-Greenough has worked in the craft beer industry for almost 10 years, doing everything from illustrating beer labels to bartending at renowned beer bars and breweries like Belmont Station, Apex, Laurelwood and Upright Brewing. He has also had a hand in creating events like the Portland Fruit Beer Festival, Portland Beer Week, and the Brewing up Cocktails series. He is available for freelance consultation in marketing, events, graphic design and branding. Contact: SamuraiArtist@NewSchoolBeer.com

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