US craft brewer New Belgium sold to Australia’s Lion
USA | The news sent shock waves across the industry. Just days after AB-InBev bought out Craft Brew Alliance, the fourth largest US craft brewer New Belgium was sold to Australia’s number two brewer Lion, which is owned by Japan’s Kirin.
Media report that the two parties began serious negotiations this summer. No financial details of the all-cash transaction were disclosed on 19 November 2019, when the deal was announced.
The sale is dependent on regulatory approval and needs to be okayed by New Belgium’s employees (700 in 2018), which have owned the brewer since 2012.
The rise of New Belgium
New Belgium was founded by Kim Jordan and her then husband Jeff Lebesch in Fort Collins, Colorado, in 1991. Brewing mainly Belgian-style beers, it rose to become the fourth-largest US craft brewer behind brewers Yuengling, Boston Beer and Sierra Nevada. It will sell nearly 1 million hl beer in 2019.
Mr Lebesch retired from his role at the brewery in the early Noughties, while Ms Jordan remained as CEO until 2015, when she took on the role as chair of the brewery’s board of directors.
Employee ownership scrapped
The deal has several far-reaching implications. By transferring her stake in the company to her employees under an ESOP (Employee Stock Ownership Plan), New Belgium became the model for other craft breweries, seeking an orderly succession without having to sell to an outsider.
Pre-empting any criticism about scrapping the ESOP, Ms Jordan wrote in a statement, posted on the company’s website:
“We will no longer be employee-owned and it would be easy to see that as a drawback. But here’s another way to look at it. More than 300 employees are receiving over USD 100,000 of retirement money, with some receiving significantly greater amounts. Over the life of our ESOP, including this transaction, the total amount paid to current and former employees will be nearly USD 190 million. We will have helped a significant number of people realise the upside of having equity in something, being a part of the American Dream.”
New Belgium loses BA craft brewer label
Likewise, the deal will spell the end of New Belgium being considered a “craft brewer” by the Brewers Association (BA). However, the firm will remain based in Fort Collins, with all of its facilities in operation, including its USD 140 million, 500,000 hl East Coast brewery in Asheville, North Carolina, which came on stream in 2016.
Also part of the deal is San Francisco’s Magnolia brewery. Founded in 1997, it was saved from bankruptcy in 2017, when New Belgium, Ms Jordan’s partner Dick Cantwell (a co-founder of Seattle’s Elysian brewery which was sold to AB-InBev in 2015) and Belgium’s Brouwerij Oud Beersel took it over for USD 2.7 million.
New Belgium’s current CEO Steve Fechheimer will continue to oversee day-to-day operations, while Ms Jordan will remain “in an advisory role, and will collaborate with other founders within Lion’s portfolio,” according to the website brewbound.com.
Read more about the effects of the takeover and Ina's analysis why New Belgium chose to sell.
