Thirsty international booze baron buys beer brands at a big discount

Anheuser-Busch InBev didn’t just want to buy another craft brewery... so it bought the whole Craft Brew Alliance.


November 13, 2019

JUSTIN TALLIS/AFP via Getty Images

Belgium-based international beer-hemoth Anheuser-Busch InBev purchased the remainder of Oregon-based Craft Brew Alliance for around $221m (the Big Bev giant already owned 31.2%).

AB InBev’s purchase price of $16.50 per share — a huge premium over the $7.33 share price at which CBA closed on Monday — sent the smaller company’s share prices up more than 120% yesterday.

It was a deal that had been brewing for a long time…

But it ended up with a very different flavor than anyone could ever have expected at the start.

Craft Brew Alliance — which consisted of Redhook Brewery, Square Mile Cider Co., Widmer Brothers Brewing, and others — partnered with AB InBev in 2016 for a 3-year distribution agreement.

That agreement gave AB InBev the option to buy Craft Brew for $22/share during year 1, $23.50/share during year 2, or $24.50/share during year 3. If AB InBev ultimately chose NOT to buy, it agreed to pay a $20m penalty.

But White Claw tore up the deal

The end of the 3-year partnership came last summer — at the height of the White Claw craze. 

AB InBev, worried about declining beer sales across the board, decided to opt out and pay the $20m penalty.

Then, Craft Brew’s share prices went flat: Although stock prices had ranged between $12-$21 during the partnership, they dropped below $8 after the deal fell through. 

So, after refusing so much as a sip a few months ago, AB InBev decided to swallow CBA’s marked-down beer brands in one gulp.

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