Dogfish Head Craft Brewer to Merge with Boston Beer Company in $300M Deal

The Boston Beer Company announced, this week, a plan to acquire the smaller—but heavy-hitting—Dogfish Head Craft Brewery, adding one of the most beloved modern craft brewers to its portfolio.  The maker of the Sam Adams beer brand is the second largest craft brewer in the US has agreed to merge with the Delaware-based Dogfish Head Craft Brewery in a deal worth more than $300 million.

According to Dogfish Head founder Sam Calagione, his family will receive approximately 406,000 shares of the Boston Beer Company. These are valued at $314.60 per share. In addition, Dogfish Head shareholders will receive $173 million cash. 

Calagione celebrates, “We talked about challenging the industry is getting, the indie craft definition, brands that consumers think are indie craft, active lifestyle beers, and we discovered how beautifully complementary and not competitive our portfolios were.”  

In fact, Calagione notes that both companies sell 99 percent of what they make through a “three-tier system.”  However, this is a complicated time in the history of the beer industry, so it is important to find new ways to move forward. 

When all is said and done, Boston Beer Company CEO Dave Burwick will head up the merged company. He comments, “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.  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.”

Of course, Dogfish Head is only the 13thlargest craft brewer in the US, as of 2018, according to data from the Brewers Association industry group. But it makes perfect sense for Boston Beer Company, who is in quite a good position to make such an acquisition.  After all, Boston Beer’s net revenue in 2019 Q1 was $251.7 million, which is up an impressive 32.1 percent from the same time last year. 

This consolidation deal comes at a time when such mergers are getting more and more popular.  Other high profile purchases in the beer industry have led the charge, though some have been at an extremely higher level.  For example, mega beer company Constellation Brands scooped up craft brewer Ballast Point Brewing & Spirits, in 2015, for $1 billion.