UPDATE: Dogfish Head to merge with Boston Beer Co.

Milton brewer teams with Sam Adams in transaction valued at $300 million
May 9, 2019


Two of the largest names in craft beer are joining forces.

Boston Beer Co., brewer of Sam Adams Boston Lager, and Dogfish Head of Milton, have signed a merger agreement valued at approximately $300 million.

Dogfish Head Founder Sam Calagione said the Dogfish brand will remain intact in the Cape Region.

“Nothing changes at our Delaware locations,” he said. “Jim Koch [founder Boston Beer Co.] and his wife have been down here and they truly love coastal Delaware. They love that our locations are so unique and contribute to the halo of our brand and that they’re important touch points for our customers to get to know our brand better.”

Calagione said merger discussions started in February at Extreme Beer Fest in Boston. Calagione and Koch have been friends for two decades and have collaborated on a number of occasions.

“We worked together on Capitol Hill to help get tax relief for small breweries throughout the country,” Calagione said. “So we’ve become good friends through the work we’ve done together.”

The duo also worked together 10 years ago to release a collaboration brew called Savor Flowers.

As for why they decided now was the time to merge their companies, Calagione said, it’s all about staying competitive.

“We saw that the international breweries that dominate the U.S. marketplace were buying up what were once true indie craft breweries,” he said. “We saw an opportunity to stand up together for true American indie craft and combine companies to stand on the same soap box to talk about the importance of American craft breweries.”

According to a press release (click to view PDF), the transaction is expected to close late in the second quarter of 2019. Under the terms of the deal, Calagione and his family will receive 407,000 shares of Boston Beer Co. stock, valued at $314.60 per share. Sam and his wife, Mariah, will be the second largest non-institutional shareholders in Boston Beer Co. after Koch. Calagione will also join Boston Beer Co.’s board of directors in early 2020.

Boston Beer will fund the cash component of the merger using cash on hand and the company’s line of credit. Dogfish shareholders will receive $170 million in cash, most of which is expected to be paid to the company’s investors. The new company will be run by Boston Beer CEO Dave Burwick.

The press release says the merger will enable both companies to better compete against global beer conglomerates 50 to 100 times their size. “Together, Boston Beer and Dogfish Head will create a powerful American-owned platform for craft beer and beyond,” the release states. “The new entity will possess more than half a century of craft brewing expertise.”

“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,” Calagione said. “This merger better positions Dogfish Head and our coworkers to continue growing within this definition for many years to come.”

The Calagiones have elected to take all of their merger consideration in the form of Boston Beer Co. stock.

“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,” Calagione said. 

“We believe we are creating the most dynamic and diverse American-owned platform for craft beer and beyond,” Koch said. “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 for each other as we continue to invest in the high-end beer category.”

The merger will also allow Dogfish to expand its Beer & Benevolence program, which is expected to raise more than $1 million this year for the Delaware chapter of The Nature Conservancy.

“With this merger, we will have a foundation called the Beer & Benevolence Foundation that will allow us to make even bigger investments in the nonprofit entities that do such important work for coastal Delaware,” Sam said.

Boston Beer Co. is one of the original craft brewers, founded by Koch in 1984. The company, now publicly traded, made its name with its flagship brew, Sam Adams Boston Lager.

Dogfish was founded in 1995 in Rehoboth Beach, and is now headquartered in Milton. The company employs 400 people; its portfolio includes the Milton brewery, a distillery, Chesapeake and Maine restaurant and the Dogfish brewpub in Rehoboth, and Dogfish Inn in Lewes.

“This is a formidable combination of brands,” said CEO Burwick. “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.”

Editor’s note: This article has been updated with new information. 

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