AB InBev has waived an option to buy the remaining shares of Craft Brew Alliance (CBA), one of the leading craft beer groups in the United States. The company announced on Friday a statement where Marcelo "Mika" Michaelis, president, Brewers Collective, Anheuser-Busch was quoted as saying: “While we are not making an offer to purchase the remaining shares of CBA, our existing commercial partnership with CBA continues to be a key complement to our industry-leading craft portfolio and we look forward to working together for many years to come."
Under an agreement signed in 2016, AB InBev had to make a qualifying offer of USD 24.50 per share (about USD 475 million based on the number of shares CBA had outstanding at the end of the last quarter) until tomorrow, or to pay CBA USD 20 million in case it opts not to do so. While many industry observers still believed, AB InBev would rather prefer to do the deal instead of paying a “fine”, inside.beer already summed up a few days ago several reasons why a deal was not very likely (inside.beer, 19.08.2019).
Still, the decision of the world’s leading brewer took many investors by surprise as the stock of CBA crashed today by more than 20 percent. Trading ended on Friday at a price of USD 10.28 per share which was USD 2.86 down on Thursday’s closing price of USD 12.96 per share. This also valued CBA at the lowest price since the company signed a new production and distribution agreement with AB InBev in August, 2016.
This agreement which also included AB InBev’s buyout option extended the U.S. wide distribution of CBA’s products through AB InBev until 2028 at much more favorable rates than before and the exclusive rights to distribute CBA brands in all countries not covered in 2016 by CBA’s export partner, Craft Can Travel.
While AB InBev continues to own a 31.3 percent stake in CBA there is still the chance for the beer behemoth to submit a takeover bid for CBA at a later time.