One of the biggest US craft brewing companies is bringing another beer heavyweight into its fold.
The Boston Beer Company — makers of the Samuel Adams beer brand and the second largest craft brewer in the United States — and Delaware-based brewer Dogfish Head Craft Brewery said Thursday that they plan to merge the companies in a deal valued at more than $300 million.
Dogfish Head founder Sam Calagione and his family will receive around 406,000 shares of Boston Beer Company, valued at $314.60 a share. Additionally, Dogfish Head shareholders are set to receive $173 million in cash.
Dave Burwick, the CEO of Boston Beer Company, will lead the merged company.
“United, we will have the highest quality, most distinct, high-end portfolio, from both a price-point and product perspective with the top-ranked sales organization to bring it to market,” Burwick said. “We expect that we’ll see more consolidation in the craft industry over time, and we’ll be in the best position to take advantage of those changes.”
Dogfish Head is the 13th largest craft brewer in the United States as of 2018, according to the industry group Brewers Association.
“I think this is a very smart move for both Dogfish Head and Boston Beer Company,” said Greg Engert, beer director and partner with the Neighborhood Restaurant Group, which includes ChurchKey, Bluejacket and The Sovereign. “They’re facing an increasingly crowded beer market.”
Dogfish Head has “been amazing in producing a host of beer styles that are really, really high quality,” and Boston Beer Company “has no interest in changing that,” Engert added.
Boston Beer Company is in a good position to make the acquisition. It reported a net revenue of $251.7 million in the first quarter of 2019 — up 32.1% from the same period of 2018.
Brewers Association President and CEO Bob Pease said in a statement, “We’re in a maturing market, and small and independent brewers are embracing ways to remain competitive. In the face of an evolving industry and in the spirit of collaboration, this strategic alliance allows Boston Beer and Dogfish Head to remain independent.”
The consolidation of the two craft brewing companies comes in the wake of other high profile purchases in the beer industry. For instance, Ballast Point Brewing & Spirits sold to mega beer company Constellation Brands in 2015 for $1 billion dollars.
WTOP’s John Aaron contributed to this report.