The Heileman, Pabst, Olympia Swap-a-Thon

After the G. Heileman Brewing Company opened up a Governmental Affairs Office in Washington, D.C. to lobby legislators and regulators, things started to turn around in the episodic battles between government officials and Russell Cleary’s dreams of nationwide expansion. In a multi-stage series of negotiations, mergers, spin-offs and outright swaps of breweries that quietly began in the late fall of 1982, G. Heileman and Pabst announced at 12:01 A.M., December 23, 1982, that the merger of the two breweries was proceeding. G. Heileman had acquired and retained over 6.5 million shares of Pabst stock. With this stage of the deal complete, Heileman would now control a part of Pabst and, in a step-two move, also pick up a portion of Olympia Brewing Company assets, with the remainder of Olympia going to the “new” Pabst. Pabst had already made a prior tender offer to Olympia on June 1, 1982, picking up forty-nine percent of Oly’s common stock.

This particular part of the swap-a-thon, however, caused a later problem for G. Heileman in mid-1983. The Securities and Exchange Commission sued Heileman, charging the brewery with buying 105,000 common shares of Olympia after Cleary had received advance information on April 19, 1982 from Robert Schmidt, president of Olympia, that Pabst was ready to make a move to acquire his Washington-based brewery. Heileman settled with the S.E.C. and paid a fine of $916,378 but neither admitted nor denied the charge of insider trading.

When this part of the takeover was completed, Heileman would own the Pabst brewing plant at Perry, Georgia, the old Blitz-Weinhard Brewery in Portland, Oregon, and the Olympia-owned Lone Star facility in San Antonio, Texas. With the possession of these breweries, the La Crosse operation would own the following brands; Blatz and its popular-priced brands, Henry Weinhard, Private Reserve, Red White & Blue, Burgermeister, Lone Star, and Buckhorn. Heileman also picked up a quick $30 million in the deal.

With these acquisitions, Heileman now had an overall brewing capacity of 25 million barrels, a bigger presence in the South where they thus far had only two-percent of the market, and an extraordinarily large group of 2,400 distributors to funnel a wide variety of products to thirsty customers.

The “new” Pabst would continue to brew and sell the P.B.R. brand, Jacob Best Premium Light, the malt liquor Olde English 800, and its Andeker Super Premium, and would pick-up the Olympia and Hamms brands. Pabst would also continue to own the Milwaukee plant, the one in Newark it had been trying to unload, Olympia’s Washington facility, and Oly’s plant in St. Paul, Minnesota—the old Theodore Hamms plant. After the dust cleared, Russell Cleary said of the successful merger, “Now we can all get back to what we do best and that is sell beer.”

There was one problem with this realignment of brewing companies, however. Pabst already had a presence in the Midwest market with its Milwaukee plant. The St. Paul plant, picked up from Olympia, was geographically redundant. Pabst had also lost a presence in the South when it gave up its Georgia plant.

In the meantime, Stroh Brewing Company had a problem with its Tampa, Florida plant. As a stipulation to acquiring Schlitz, Stroh had agreed to a 1982 federal court order to divest itself of a plant in the southeast to win final approval from the federal government.

The solution to the dilemmas faced by Pabst and Stroh was solved in a government-sanctioned agreement by the two brewers to do a straight swap of their problematic plants. In doing so, Pabst regained a southeastern regional presence after losing its Georgia operation. Stroh, in the meantime, had been trucking its flagship product and the acquired Schlitz brands from its Detroit and Memphis breweries into the Twin Cities market at considerable costs.

The acquisition of the St. Paul plant took care of this financially-draining transportation problem for Stroh and thus began the first round of that perennial question by U.S. beer drinkers—“Which brewery owns what?”

I like Stan’s idea! But a Barrel Aged Barleywine turned into a syrup would be great. Good idea Jay. When’s breakfast?

Pretty funny that they insist on Olympia and the pancake mix… I think a lager would be better, adding that crisp note that only a pilsner can. But it does bring up the debate of what is the best beer to have for Breakfast!

To make this point, Laurent Demuynck, a Belgian native who heads Duvel Moortgat USA, said with all seriousness: “For breakfast, I put Duvel in my waffle batter … Lightens it up.”

I think that is the point of using any beer in making waffles. Personally, I favor one with good flavor (like Duvel).

http://www.evansale.com/hefeweizen_pancakes.html