The Boston Beer Company and Dogfish Head Brewery have signed a definitive merger agreement, bringing together two independent craft breweries and their founders and brewers, Jim Koch and Sam Calagione. The new entity will possess more than half a century or craft brewing experience, a balanced portfolio of leading and “beyond beer” brands at high-end price points, and industry leadership in innovation and quality.
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 sales team with Dogfish Head’s portfolio of IPA and session sour brands. The combined company will maintain its status as an independent craft brewery, and will be better positioned to compete against the global beer corporations within the craft beer category that are 50 to 100 times its size, while still representing less than two percent of beer sold in the U.S.
The combined partnership 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 to lead brewing innovation for the newly combined company. Sam and Mariah Calagione, Dogfish cofounders, will take most all of their merger consideration in the form of SAM stock and will collectively become the largest non-institutional shareholders after Jim Koch following the close of the transaction, which is expected to uccur late in the second quarter of 2019, subject to customary closing conditions.
Sam Calagione 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,” says 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,” says 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. “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.”