Asahi Likely To Buy Grolsch, Meantime & Peroni

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Anhesuer-Busch InBev has been trying to sell off their Grolsch, Meantime and Peroni, since acquiring SABMiller last year. ABI confirmed this morning that they’ve received a binding offer to purchase the three beer brands from Japan’s Asahi Breweries. According to Just Drinks, “Asahi has been granted a ‘period of exclusivity’ related to the purchase, which, AB InBev flagged, is ‘conditional on the successful closing of the recommended acquisition of SABMiller by AB InBev.'” The amount offered by Asahi is 2.55 billion euros (around $2.86 billion in U.S. dollars) and which, if accepted, would go a long way toward addressing regulatory concerns about the acquisition of SABMiller by ABI. Reuters also has more about the particulars.

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The Asahi Breweries headquarters in Tokyo, from a trip I took there to judge a beer competition in 2013.

ABI Buys Breckenridge Brewery

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Sheesh, look what happens when I try to take a day off. For the third workday in a row, Anheuser-Busch InBev has announced yet another acquisition, this time it was Breckenridge Brewery of Colorado. This is becoming almost routine. Again, the price was not disclosed, and the transaction is expected to close in the first quarter of next year. Last year, the brewery ranked No. 50 on the list of the Top 50 Craft Breweries and is expected to produce around 70,000 barrels this year. Here’s the press release from ABI:

Anheuser-Busch today announced it will acquire Colorado-based Breckenridge Brewery. With this agreement, Breckenridge Brewery is the seventh craft brewery to join The High End, Anheuser-Busch’s business unit of craft and import brands.

“We’re excited about the partnership and have been encouraged to continue on our path and become more innovative moving forward,” said Todd Usry, President of Breckenridge Brewery. “I’m a believer in what The High End is focused on accomplishing and we are flattered that our team was chosen to help guide that journey. We’re looking forward to utilizing resources like decades of research and brewing expertise as we continue to create new beers.”

Available in 35 states, Breckenridge Brewery will sell approximately 70,000 barrels of beer in 2015. The new brewery and Farm House restaurant in Littleton have positioned the brewery for future growth. The brewery will continue to make its unique portfolio of beers – ranging from their Vanilla Porter, to Agave Wheat, to their core brands, seasonal specialties and barrel-aged beers.

“Breckenridge Brewery has a long history of innovation and they continue to brew new and exciting beers, from their specialty brews like the Mountain Series that celebrates the brewery’s origin as a ski town brewpub, to their planned nitro can series,” said Andy Goeler, CEO, Craft, The High End. “They are innovative and have built an amazing business that’s enabled them to get their great beers to fans across the country. We look forward to even more growth together.”

Breckenridge Brewery will join Goose Island Beer Company, Blue Point Beer Company, 10 Barrel Brewing, Elysian Brewing Company, Golden Road Brewing and Four Peaks Brewing Company as part of The High End’s craft beer portfolio.

The partnership includes the company’s new production brewery and Farm House restaurant in Littleton, and original brewpub and current innovation center in the mountain town of Breckenridge.

The current management group, Breckenridge-Wynkoop will continue to own and operate its remaining businesses including: Ale House at Amato’s in Denver, Breckenridge Ale House in Grand Junction, Breckenridge Colorado Craft in Denver, The Cherry Cricket in Denver, Mainline in Fort Collins, Phantom Canyon Brewing Co. in Colorado Springs and Wynkoop Brewing Company in Denver.

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In addition, Breckenridge posted a letter on their website blog entitled A Letter From Your Friends at Breckenridge Brewery:

Today’s announcement of our acquisition by Anheuser-Busch’s craft and import division may come as a surprise to many of you. We want to share with you how we came to this decision, what it means to Breckenridge Brewery and to those who’ve supported us for so long.

We’ve been in this creative and dynamic industry for over 25 years, loving everything about it. That won’t change. The passion for quality and culture that got us where we are today isn’t going anywhere. We’re proud of the fact that you can find our beers in 35 states; we’ve worked hard to get our beers to as many of you as possible throughout the years. The High End, Anheuser-Busch’s craft and import division, shares the same excitement for our category and commitment to quality. We will join a group of established and innovative craft brewers as part of The High End, and we look forward to what opportunities these relationships will bring to us.

Our brewpub in Breckenridge, our Littleton brewery and its Farm House restaurant are all part of this new entity. Other properties under the Breckenridge-Wynkoop umbrella will continue to be owned and operated by B-W and are not part of this arrangement.

Of course, the same great team who helped build Breckenridge Brewery won’t be going anywhere. We are excited about the opportunity this partnership brings to all of us. We’ll continue to own decisions about the beers we create and the ingredients in them. What people relate to in this industry is authenticity. If there were plans to come in and change our employees, our culture, and our recipes, well, that would completely undermine the reason for the partnership at all. What this new partnership does offer us is access to resources that will help us continue to innovate and bring our beer to more people.

We ultimately owe our success to you, our followers and supporters. I hope you will give us the chance to prove to you over time that we will continue to be Breckenridge Brewery.

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At this point, the only question is who will it be tomorrow?

ABI Buys London’s Camden Town Brewery

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Anheuser-Busch InBev announced this morning that they were buying British brewer Camden Town Brewery, located in London. Despite having recently raised over £2.75 million through a crowdfunding campaign on Crowdcube (nearly doubling their £1.5 million target), which was purported to fund a second London brewery, Camden Town is quoted in the Guardian that “the businesses needed a major investor to fund the construction of a second brewery that will create 30 jobs.”

Jasper Cuppaidge, who founded the brewery just five years ago, also posted a short statement on their website:

The ‘craft’ brewing movement has seen incredible growth driven by innovation, quality and daring. Camden Town Brewery has been at the forefront of this revolution. The success and reputation we have built has been nothing short of incredible. That has been thanks to all of you and the great beers we’ve brewed.

To stay at the forefront of this movement and secure our future success, we have to build a bigger brewery, employ more people and gain access to an international distribution network.

We can’t do this on our own. That’s why I’m proud to say I’ve signed a deal with AB InBev.

This partnership is going to help us deliver our plans to grow. With AB InBev’s support we will expand our operations, create more jobs in London and continue to brew our great beer and get it to more drinkers. Read more here.

We are really excited about taking this opportunity to turn Camden, and the quality it stands for, from being an outstanding London brewer, to being a world famous one. We hope you are too.

If you’re one of our shareholders, we’ll be in contact soon with more details about what the news means for you. We’ll also be updating the investor site shortly with answers to questions you may have.

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The terms of the deal, and the price, were not disclosed. The transaction is expected to close quickly, by January 7. Camden Town also posted a more traditional press release:

Camden Town Brewery today announced that it is partnering with Anheuser-Busch InBev (AB InBev) to pave the way for further growth and expansion. The partnership will enable Camden Town Brewery to expand its operations, bringing more of its popular canned, bottled and kegged beer to more people. The deal will see AB InBev acquire Camden Town Brewery.

Founded by Jasper Cuppaidge, the owner of The Horseshoe pub in Hampstead, Camden Town Brewery started full production in 2010. From an original staff of three people, it now employs a team of 95 and has sold 12 million pints in 2015. Their beers are available in over 1000 pubs, bars, restaurants and retailers around the UK, as well as further afield in Sweden, Australia and Japan.

The deal follows a successful bid by Camden Town Brewery to raise capital via crowd funding and will support the company’s plan to build a second brewery in London, employing 30 more people and meeting growing demand for its products. The partnership will enable Camden Town Brewery to brew more of its own distinctive beers and continue to innovate, while maintaining its focus on quality.

Jasper Cuppaidge said: “Our growth has been phenomenal. To keep up with the demand for our distinctive beers we’ve had to look at expanding our brewing capacity and team. AB InBev is going to be our strategic partner, helping us maintain the character and quality of our beers, while giving us access to the investment we need to drive Camden to being ever more successful at home and abroad.

“Opportunities like this come rarely. We believe we must have the ambition to grab this opportunity and turn Camden Town Brewery, and the quality it stands for, from being an outstanding London brewer to being a world famous one.”

Iain Newell, European Director of Specialities & Craft, AB InBev, said: “We have a passion for great beer. Camden Town is a creative business with a great range of brands that will complement our existing portfolio. We will support their ambitious plans for the future, using our expertise and global distribution network to help them get their great beer to more people.”

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ABI Buys Four Peaks

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Anheuser-Busch InBev announced this morning that they were buying Arizona brewer Four Peaks. Four Peaks is nearly twenty years old and Arizona’s largest brewery, on track to make approximately 70,000 barrels in 2015. As a nod to just how routine this type of news is becoming, ABI’s press release is titled “Anheuser-Busch Welcomes Four Peaks Brewing Company To The High End Business Unit.” The price was not disclosed and as is typical, the founders of the brewery will be remaining with the business.

Today, Anheuser-Busch announced an agreement to acquire Four Peaks Brewing Company, the leading craft brewer in the state of Arizona. Four Peaks will represent the sixth operation to join the growing list of innovative and progressive craft breweries within The High End, the company’s business unit providing unique craft and import brands.

“For 20 years we’ve had more amazing experiences than I can count doing what we love to do most – brewing great beer and sharing it with a growing craft community in Arizona that has supported us from day one,” said Andy Ingram, Four Peaks co-founder. “We’re excited to join the enthusiastic team and tap into their resources to expand our footprint and share our beer with even more people moving forward.”

Four Peaks, which opened its doors in 1996, expects to sell approximately 70,000 barrels of beer in 2015. The brewery will continue to brew their award-winning beers, including their flagship beer, Kilt Lifter, a Scottish-Style Ale that accounts for more than 60 percent of the brewery’s sales. Four Peaks also produces popular limited releases like cask versions of its mainstay beers and its four-time World Beer Cup-medaling Hopsquatch Barleywine. In addition to strong mainstay beers and limited releases, Four Peaks has seen great success with newer brews like its Pumpkin Porter, which grew more than 150 percent last year.

“As the leading craft brewery in Arizona, we’re proud of what we’ve built and of our brewing heritage. We’re excited to build on that success with The High End,” said Jim Scussel, Four Peaks co-founder. “Arizona has a rapidly-growing fan base for craft beer and we look forward to more opportunities to share what Four Peaks is about within our local community, and beyond,” added Randy Schultz, Four Peaks co-founder.

Four Peaks will join Goose Island Beer Company, Blue Point Brewing Company, 10 Barrel Brewing, Elysian Brewing Company and Golden Road Brewing as part of the growing portfolio of exceptional craft beers within The High End.

“It’s exciting to partner with another group of passionate craft beer founders, this time in the great state of Arizona,” said Andy Goeler, CEO, Craft, The High End. “What Andy, Jim, Randy and the team have been able to accomplish is remarkable and a testament to their culture and portfolio of great beers. We look forward to learning from each other and bringing more Four Peaks beers to craft lovers in the Southwest.”

The partnership includes the company’s three primary locations: the 8th Street Brewery & Pub in Tempe; the Wilson Street Brewery & Tasting Room in Tempe; and the Grill & Tap in Scottsdale, in addition to continuing their partnership at the Sky Harbor Airport facility. Anheuser-Busch’s acquisition of Four Peaks is expected to close during the first quarter of 2016. Terms of the agreement were not disclosed.

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Consumers File Lawsuit To Stop ABI Buying SABMiller

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In a particularly strange twist, 23 consumers — 19 from Oregon, 3 from California and 1 from Washington — have filed a lawsuit in the United States District Court, for the District of Oregon, Medford Division. The Plaintiffs are represented by two law firms, the Alioto Law Firm of San Francisco, California, and Cauble & Cauble, LLP of Grant’s Pass, Oregon. The lawsuit names both Anheuser-Busch InBev and SABMiller as Defendants and the initial filing requests “Injunctive Relief to Prohibit the Acquisition of SABMiller PLC by Anheuser-Busch InBev, SA/NV as a Violation of Section 7 of the Clayton Antitrust Act, 15 U.S.C. § 18.” The 33-page complaint is available to read online as a pdf. The Oregonian is reporting on at least a few of the Plaintiff’s rationales for the lawsuit. “I don’t think it’s good for consumers, I don’t think it’s good for industry, I don’t think it’s good for the tax base, I don’t think it’s good for any of that,” states Plaintiff James DeHoog, who owns an air quality and environmental consulting business in Central Point, which is near where the case was filed in Medford, Oregon. Courthouse News Service also has an account of the filing.

It will certainly be interesting to see how far they get with this.

Court Gavel And Money

Beer In Ads #1736: Quality Beer From Belgium


Saturday’s ad is for Stella Artois, from 2006. This is not a particularly old ad, but it’s meant to look older, or at least more classic, than it is. I really like the visuals of it, if not the beer itself. But then I love flags and am an amateur vexillologist. I visited the Stella Artois brewery in Leuven last year, with a large group of beer judges, and it holds the record for “worst beer tour” ever. Not the longest (that was a couple of days later) but they kept us sweating in hot, confined area, restricted our movement like they were afraid we were spies and generally treated us like children. Oh, and I later found out they thought we were rude, which is hilarious. I had also hoped that at the source, I’d finally understand what all the fuss is abut the beer. Nope, it still didn’t taste very good, at least to me.

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SABInBev Will Control 6 Of 10 Best-Selling U.S. Beers

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According to a new report in Business Insider, the new entity combining Anheuser-Busch InBev and SABMiller will control six out of the ten best-selling beers in America, and it would have been eight, except the deal currently stipulates that “Molson Coors will take Miller off of SABMiller’s hands.” But I especially like the handy flowchart they created to show the evolution of the various companies that will come together to become SABInBev, or whatever they end up calling the new beer behemoth. Sadly, it looks like SABMiller, or what’s left of it, will simply be absorbed into ABI.

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SABInMillerBev, or “A Brief History Of Big Beer”

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Niall, at the Missing Drink, has an interesting post about the possible buyout of SABMiller by Anheuser-Busch InBev. Entitled A Brief History of Big Beer, he provides some analysis of the deal, but I especially like his helpful chart of the M&A of all the major players, which is below. It’s great to see them laid out to encapsulate the history of those big deals, especially in recent decades.

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Click here to see the chart full size.

Here’s his clever take on what the newly minted entity might be called, and what a new alphabet soup logo might look like. It was genius taking the “AB” from ABI and putting it with the “S” from SAB. It certainly will be interesting to see what new name (and logo) does emerge if the deal ultimately goes through.

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SABMiller and Anheuser-Busch InBev Reach “Agreement In Principle”

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While most of us were sleeping, it appears SABMiller and Anheuser-Busch InBev were quite busy, and announced this morning SABMiller and Anheuser-Busch InBev [Reach] Agreement in principle and extension of PUSU. The New York Times has an analysis of the deal, or you can read the entire Press Release from SABMiller:

ABI-SABM

LONDON–The Boards of AB InBev (Euronext: ABI) (NYSE: BUD) and SABMiller (LSE: SAB) (JSE: SAB) announce that they have reached agreement in principle on the key terms of a possible recommended offer to be made by AB InBev for the entire issued and to be issued share capital of SABMiller (the “Possible Offer”).

Terms of Possible Offer

Under the terms of the Possible Offer, SABMiller shareholders would be entitled to receive GBP 44.00 per share in cash, with a partial share alternative (“PSA”) available for approximately 41% of the SABMiller shares.

The all-cash offer represents a premium of approximately 50% to SABMiller’s closing share price of GBP 29.34 on 14 September 2015 (being the last business day prior to renewed speculation of an approach from AB InBev).

The PSA consists of 0.483969 unlisted shares and GBP 3.7788 in cash for each SABMiller share, equivalent to a value of GBP 39.03 per SABMiller share on 12 October 2015, representing a premium of approximately 33% to the closing SABMiller share price of GBP 29.34 as of 14 September 2015. Further details of the PSA are set out below.

In addition, under the Possible Offer, SABMiller shareholders would be entitled to any dividends declared or paid by SABMiller in the ordinary course in respect of any completed six-month period ended 30 September or 31 March prior to completion of the possible transaction, which shall not exceed USD 0.2825 per share for the period ended 30 September 2015 and a further USD 0.9375 per share for the period ended 31 March 2016 (totalling USD 1.22 per share) and shall not exceed an amount to be agreed between AB InBev and SABMiller in respect of periods thereafter (which shall be disclosed in any announcement of a firm intention to make an offer).

The Board of SABMiller has indicated to AB InBev that it would be prepared unanimously to recommend the all-cash offer of GBP 44.00 per SABMiller share to SABMiller shareholders, subject to their fiduciary duties and satisfactory resolution of the other terms and conditions of the Possible Offer.

Antitrust and reverse break fee

In connection with the Possible Offer, AB InBev would agree to a “best efforts” commitment to obtain any regulatory clearances required to proceed to closing of the transaction. In addition, AB InBev would agree to a reverse break fee of USD 3 billion payable to SABMiller in the event that the transaction fails to close as a result of the failure to obtain regulatory clearances or the approval of AB InBev shareholders.

Pre-conditions

The announcement of a formal transaction would be subject to the following matters:

  1. a) unanimous recommendation by the Board of SABMiller in respect of the all-cash offer, and the execution of irrevocable undertakings to vote in favour of the transaction from members of the SABMiller Board, in a form acceptable to AB InBev;
  2. b) the execution of irrevocable undertakings to vote in favour of the transaction and to elect for the PSA from SABMiller’s two major shareholders, Altria Group, Inc. and BevCo Ltd., in each case in respect of all of their shareholding and in a form acceptable to AB InBev and SABMiller;
  3. c) the execution of irrevocable undertakings to vote in favour of the transaction from AB InBev’s largest shareholders, the Stichting Anheuser-Busch InBev, EPS Participations SaRL and BRC SaRL in a form acceptable to AB InBev and SABMiller;
  4. d) satisfactory completion of customary due diligence; and
  5. e) final approval by the Board of AB InBev.

The Board of AB InBev fully supports the terms of this Possible Offer and expects (subject to the matters above) to give its formal approval immediately prior to announcement.

AB InBev reserves the right to waive in whole or in part any of the pre-conditions to making an offer set out in this announcement, other than c) above which will not be waived.

The conditions of the transaction will be customary for a combination of this nature, and will include approval by both companies’ shareholders and receipt of antitrust and regulatory approvals.

In view of the timetable for obtaining some of these approvals, AB InBev envisages proceeding by way of a pre-conditional scheme of arrangement in accordance with the Code.

The cash consideration under the transaction would be financed through a combination of AB InBev’s internal financial resources and new third party debt.

Further details of the PSA

The PSA comprises up to 326 million shares, which will be available for approximately 41% of the SABMiller shares. These shares would take the form of a separate class of AB InBev shares (the “Restricted Shares”)[1], with the following characteristics:

  • Unlisted and not admitted to trading on any stock exchange;
  • Subject to a five-year lock-up from closing;
  • Convertible into AB InBev ordinary shares on a one for one basis after the end of that five year period;
  • Ranking equally with AB InBev ordinary shares with regards to dividends and voting rights; and
  • Director nomination rights.

SABMiller shareholders who elect for the partial share alternative will receive 0.483969 Restricted Shares[2] and GBP 3.7788 in cash for each SABMiller share.

Extension of the PUSU deadline

In accordance with Rule 2.6(a) of the Code, AB InBev was required, by not later than 5.00 pm on 14 October 2015, to either announce a firm intention to make an offer for SABMiller in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer for SABMiller, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies.

In accordance with Rule 2.6(c) of the Code, the Board of SABMiller has requested that the Panel on Takeovers and Mergers (the “Panel”) extends the relevant deadline, as referred to above, to enable the parties to continue their talks regarding the Possible Offer. In the light of this request, an extension has been granted by the Panel and AB InBev must, by not later than 5.00 pm on 28 October 2015, either announce a firm intention to make an offer for SABMiller in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer for SABMiller, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline will only be extended with the consent of the Panel in accordance with Rule 2.6(c) of the Code.

AB InBev reserves the following rights:

  1. a) to introduce other forms of consideration and/or to vary the composition of consideration;
  2. b) to implement the transaction through or together with a subsidiary of AB InBev or NewCo or a company which will become a subsidiary of AB InBev or NewCo;
  3. c) to make an offer (including the all-cash offer and PSA) for SABMiller at any time on less favourable terms:

(i) with the agreement or recommendation of the Board of SABMiller;
(ii) if a third party announces a firm intention to make an offer for SABMiller on less favourable terms; or
(iii) following the announcement by SABMiller of a whitewash transaction pursuant to the Code; and

  1. d) to reduce its offer (including the all-cash offer and PSA) by the amount of any dividend that is announced, declared, made or paid by SABMiller prior to completion, save for ordinary course dividends declared or paid prior to completion, which shall not exceed USD 0.2825 per share for the period ended 30 September 2015 and a further USD 0.9375 per share for the period ended 31 March 2016 (totalling USD 1.22 per share) and shall not exceed an amount to be agreed between AB InBev and SABMiller in respect of periods thereafter (which shall be disclosed in any announcement of a firm intention to make an offer).

The announcement does not constitute an offer or impose any obligation on AB InBev to make an offer, nor does it evidence a firm intention to make an offer within the meaning of the Code. There can be no certainty that a formal offer will be made.

A further announcement will be made when appropriate.

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