USA: Boston Beer and Dogfish Head Brewery announce merger

Boston Beer Company and Dogfish Head Brewery, second and 13th-largest craft brewery in the United States on the list of the U.S. Brewers Association, have announced to merge their respective businesses. The transaction is expected to close late in the second quarter of 2019.

The merger brings together “two pioneering independent Craft breweries and two illustrious founders and brewers, Jim Koch and Sam Calagione,” both companies said in a press release. However, the merger is not one amongst equals. Boston Beer, maker of the famous Sam Adams beer line, shipped last year 4.3 million barrels (5.0 million hl) of beer, compared to Dogfish’s only 300,000 barrels (352.000 hl).

The combined company will maintain its status as an independent craft brewery, as defined by the Brewers Association. The companies hope that the merged company will be better positioned to compete against the global beer conglomerates within the craft beer category that are 50- and 100-times its size, while still representing less than 2% of beer sold in the United States.

The two company’s product lines are extremely complementary, without much overlap. “Following the transaction, the combined company will have a leading position in the high end of the U.S. beer market, bringing together Boston Beer’s craft beer portfolio and top-ranked sales team with Dogfish Head’s award-winning portfolio of IPA and session sour brands,” the statement goes on.

Just hours before the Boston Beer merger was made public a new legislation was approved by the Delaware Senate to increase the production volume threshold for in-state craft brewers from 2 million to 6 million barrels. It also allows Delaware “microbreweries” to be affiliated with out-of-state brewers while retaining their current license privileges.

Samand Mariah Calagione, Dogfish Head’s two co-founders, will receive approximately 406,000 shares of Boston Beer stock based on a share price of USD 314.60.  Dogfish Head shareholders will also receive USD 173 million in cash, with the majority of the sum for the benefit of Dogfish Head’s financial investor LNK Partners, a New York-based private equity firm, which bought four years ago a 15 percent stake in Dogfish Head and which is now exiting its investment.

Sam Calagione, who will become the largest non-institutional shareholders in Boston Beer after Jim Koch, will join Boston Beer’s board of directors and Dogfish Head’s band of off-centered co-workers will join the Boston Beer team and continue to be heavily involved in beer and “beyond-beer” projects, as the companies expand opportunities for future innovation.

“We believe we are creating the most dynamic and diverse American-owned platform for craft beer and beyond,” said Jim Koch, founder and Chairman of The Boston Beer Company. “Dogfish Head has a proud history as a craft beer pioneer with a brand that is beloved by American consumers and highly respected by the industry. Sam and I have stood shoulder to shoulder in some of the defining efforts in Craft brewing including the creation of the Brewers Association, the craft beer definition, the craft brewer seal and the creation of the SAVOR food and beer event. This combination is the right fit as both Boston Beer and Dogfish Head have a passion for brewing and innovation, we share the same values and we will learn a lot from each other as we continue to invest in the high-end beer category.  I am very happy that Sam will join the Board of Directors at Boston Beer.  He is a tremendous friend, innovator and brewer, and I could not be more excited to work together with him for many years to come.”

“Not only are Dogfish Head and Boston Beer two original American breweries, but Jim Koch and I worked hard with other leading craft brewery founders and the Brewers Association to develop and champion what defines independent American brewers,” said Sam Calagione, founder and brewer of Dogfish Head. “This merger better positions Dogfish Head and our co-workers to continue growing within this definition for many years to come.  In fact, Mariah and I believe so much in the future of our merged companies that we are all in, and personally we’re reinvesting nearly all of the proceeds back into the combined entity. We’re also proud to announce that we intend to devote a percentage of the Boston Beer stock that we receive to establishing a foundation and funding various local charitable programs.”

The combined company will be led by Boston Beer CEO, Dave Burwick, who joined the company in February 2018 (, 14.2.2018) “This is a formidable combination of brands, incredible brewing talent, and leaders who remain 100 percent focused and committed to the long-term health of our breweries and growing the beer industry. 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.”

Meanwhile, George Pastrana will continue to serve as chief operating officer and president of Dogfish Head, a role he was assigned in January after the position had been idle for more than one year after Nick Benz departed the company in October 2016 (, 9.1.2018).

Boston Beer is recognized for helping launch the craft beer industry after opening its doors and brewing the first batch of Samuel Adams Boston Lager in 1984.  From the launch of craft brewing to 2019 Sam Adams continues to be the most award-winning craft brewer in the world. In addition to its iconic Sam Adams beer, the company now offers nationally other leading brands such as Angry Orchard hard cider, Truly Hard Seltzer and Twisted Tea.  Founded 23 years ago, Delaware-based Dogfish Head’s family of beers includes the continually-hopped 60, 90, and 120 Minute IPAs, and robust sour beer program led by SeaQuench Ale. Dogfish Head is recognized as an early leader in bringing culinary innovations to the U.S. craft beer scene, and Sam Calagione was named ‘Outstanding Wine, Spirits, or Beer Professional’ by the prestigious James Beard Foundation. Following the opening of their brewery and tasting room, Dogfish Head also established one of the first Craft distilleries in America, Dogfish Head Brewings & Eats brew pub, Chesapeake & Maine restaurant, and the Dogfish Head Inn. The newly combined company will maintain a significant presence in Delaware.

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