Anheuser-Busch declines option to buy all of Craft Brew Alliance

In this 2013 file photo, bottles of Kona Longboard Lager beer slide down from the filler at Craft Brew Alliance Inc.'s packaging area at its North Portland brewery. (Benjamin Brink/The Oregonian via TNS, file)

Anheuser-Busch In-Bev bought out Portland’s pioneering Craft Brew Alliance for $220 million Monday, three months after the macrobrewer rejected a much pricier deal.

The transaction cements Anheuser-Busch’s ownership of the Portland company that makes ­Widmer beer and several other well-known brews, including Kona and Redhook. Monday’s deal values the total company at $320 million.

Anheuser-Busch already owned just under a third of the Craft Brew Alliance. Under terms of a 2016 agreement, it had until August to buy the rest for a predetermined price of $24.50 per share — about $475 million altogether — or pay a $20 million opt-out fee.

At the time, shares of Craft Brew Alliance were trading around $13, and Anheuser-Busch opted not to move forward. The stock faded after the St. Louis company walked away and closed Monday at just $7.33 a share.

The two companies remained tightly linked because Anheuser-Busch still owned a substantial share in the Portland business. So it was no great surprise that the two companies came together on a deal Monday that gives Anheuser-Busch complete ownership of Craft Brew Alliance, albeit at a price one-third below the August option.

“By combining our resources, our talented teammates, and dynamic brands, we will look to nurture the growth of (Craft Brew Alliance’s) existing portfolio as we continue investing in innovation to meet the changing needs of today’s beverage consumers, all while delivering certainty of value to our shareholders,” Andy Thomas, chief executive of Craft Brew Alliance, said in a written statement announcing the deal.

Anheuser-Busch is best known for such mass-­market brands as Budweiser, but it owns many craft brewers, including Bend’s 10 Barrel Brewing.

In addition to Widmer, Kona and Redhook, Monday’s deal brings Appalachian Mountain Brewery, Wynwood Brewing, Cisco Brewers, Omission Brewing and Portland’s Square Mile Cider Co. into the Anheuser-­Busch portfolio.

The Craft Brew Alliance formed in 2008, when Widmer combined with Redhook. Each brewer had preexisting distribution agreements with Anheuser-Busch.

Craft Brew Alliance is the nation’s 12th-largest brewer, producing more than 719,000 barrels last year, according to regulatory disclosures. The Portland company’s sales were flat last year at $206.2 million, with profits of $4.1 million.

It had 665 employees at the end of last year and employs 240 in Portland. Craft Brew Alliance said Monday no operations changes are planned locally.

Widmer played a formative role in Portland’s beer scene. It dates to 1984 and began taking off the following year, after Oregon lawmakers passed the so-called “brewpub bill,” which permitted brewers to sell their own beer on-site.

Widmer’s Hefe popularized an American style of the traditional German hefeweizen and made the Portland company among the region’s best-known brewers.

In recent years, though, Widmer and many other old-school Portland microbrews have lost popularity to a new generation of craft brewers. Widmer closed its north Portland tasting room in January, following the November 2018 closure of Portland Brewing’s northwest Portland restaurant. Another early tastemaker, Bridgeport, shut down last winter.

The hottest brew now in the Craft Brew Alliance portfolio is the Kona brand from Hawaii. Keyed by Longboard Island Lager, Kona accounted for more than 450,000 barrels last year — most of Craft Brew Alliance’s production.

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