AB-InBev offers to spin off Kona to secure Craft Brew Alliance deal
USA | To get the green light from the antitrust watchdogs for its purchase of Portland’s Craft Brew Alliance (Widmer, Redhook, Kona, etc), AB-InBev said in June 2020 that it will sell off Kona’s Hawaii brewery and two brewpubs including the rights to the brand on the islands.
Thrown into the bargain is Kona’s new 120,000 hl brewery on Hawaii’s Big Island, which is scheduled to open later this year.
However, AB-InBev will retain control of the Kona brand in both the remaining 49 states and internationally, as well as Kona’s US production and sales, much of which is brewed at Widmer Brothers in Portland.
The buyer is PV Brewing Partners, a new firm formed by investment group VantEdge Partners, which operates 260 quick-serve restaurants, including Dunkin’ Donut, Taco Bell and Jamba, and … step forward … former Anheuser-Busch President David Peacock!
A veteran of the brewing industry, Mr Peacock, 52, succeeded August Busch IV as President of Anheuser-Busch after its acquisition by InBev in 2008 before stepping down in 2012. He has partnered with VantEdge in other business ventures before, media say.
Bringing a long story to an end
The website seekingalpha.com reminds us that AB-InBev and Craft Brew Alliance (CBA) have been cooperating in some form or another for the past 25 years, with AB-InBev eventually controlling 31.2 percent of listed CBA.
“The last commercial arrangement, signed in 2016 after a strategic review, forced AB-InBev to pay USD 20 million to CBA if it did not make a qualifying offer by August 2019. The price to be paid for the remaining shares would increase yearly, and in 2019 that price would reach USD 24.5 per share. In August 2019, AB-InBev decided that it would not be making a qualified offer and paid the USD 20 million. As a result, CBA’s share price tanked to around USD 8 per share,” seekingalpha.com reports.
However, in November 2019 both companies announced that AB-InBev would buy the remaining 68.8 percent of shares that it did not own for USD 16.5 per share. This means that AB-InBev will be paying USD 321 million for the remaining shares, valuing CBA at USD 466 million.
CBA was formed in 2008 and operates breweries and brewpubs across the United States. The company has several brands in its portfolio, but its most valuable asset is the Hawaiian-themed Kona brand with sales of about 550,000 hl beer in 2019. CBA’s total beer sales were 850,000 hl, while net turnover was USD 193 million in 2019, down USD 13 million over 2018.
Once the deal is approved, expected before the end of this year, AB-InBev will integrate CBA into AB-InBev. This should be simple as AB-InBev already moves CBA’s brands through its breweries and distribution network.
