Boston Beer Co. and Dogfish Head to Merge

Two major craft beer producers and pioneers will become one.

The Boston Beer Company and Dogfish Head Brewery announced today that they have signed a definitive merger agreement.

The combined company will maintain its status as an independent craft brewery, as defined by the Brewers Association. It will be “better positioned to compete against the global beer conglomerates within the craft beer category that are 50- and 100-times its size,” the company says in a release. And this combination brings together two of the leading founder-brewers in the U.S.: Jim Koch of Boston Beer, and Sam Calagione of Dogfish Head. Both will continue leading brewing innovation for the newly combined company.

Sam and Mariah Calagione, Dogfish Head’s co-founders, will reportedly take substantially all of their merger consideration in the form of SAM stock and will collectively become the largest non-institutional shareholders after Koch.

Sam will join Boston Beer’s board of directors, while Dogfish Head’s employees will join the Boston Beer team and continue to be heavily involved in beer and “beyond-beer” projects, the company says, as both breweries expand opportunities for future innovation.

“We believe we are creating the most dynamic and diverse American-owned platform for craft beer and beyond,” says Koch. “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.”

SaysCalagione, “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 . . . 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.

“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,” he says. “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.

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. In addition to its ubiquitous Sam Adams beer, the company now offers other nationally 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 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.

The transaction is expected to close late in the second quarter of 2019, subject to customary closing conditions. It is expected that Calagione will join Boston Beer’s Board of Directors beginning in 2020.

Dogfish Head is on pace to sell nearly 300 thousand barrels for the full year 2019, the company says, which would represent high single digit growth versus the prior full year. Net sales for the full year 2019 are expected to be between $110 and $120 million. Dogfish Head employs approximately 400 employees, produces most of its beer at its brewery in Milton, DE, and sells its beer in more than 40 states.

Boston Beer plans to consolidate Dogfish Head results into Boston Beer’s financial results beginning late in the second quarter of 2019. Boston Beer currently estimates that the transaction will be neutral to slightly accretive in 2019 and will not have a material impact on full-year 2019 earnings per diluted share.

Nixon Peabody served as legal counsel to Boston Beer in this transaction. Dogfish Head was advised by McDermott Will & Emery LLP, and Arlington Capital Advisors.


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