If partnership is prelude to acquisition, another leading U.S. craft brewers is beginning the journey toward ownership by a giant in the beer business.
Petaluma, Calif.-based Lagunitas Brewing Co. and the Heineken Co. today announced a joint venture in which Heineken will take a 50 percent stake in the 22-year-old craft brewer, which opened a second brewery in Chicago last year and is building a third facility in Azusa, Calif.
According to Heineken, the joint venture will allow Lagunitas to leverage Heineken’s global distribution network. Lagunitas will continue to sell through its U.S. distributors, and the companies’ U.S. beer portflios will not be integrated.
Terms of the deal, which is expected to close in the fourth quarter, were not disclosed.
Lagunitas experienced 58 percent growth between 2012-2014. It brewed approximately 600,000 barrels last year.
Lagunitas’ representatives initiated discussions with Heineken in the spring, after discounting a possible partnership with Anheuser-Busch InBev because they “knew that wasn’t going to work,” according to Dan Clivner, a partner in the Los Angeles office of Sidley Austin. Both Lagunitas and Heineken will benefit from a partnership, he says, adding, “It’s fundamental to the deal that it’s not 51 or 50.01 percent ownership by Heineken. Lagunitas puts tremendous importance on autonomy. Both parties are very committed to a strategic alliance.”
In 2007, Anheuser-Busch forged a similar distribution partnership with Chicago-based Fulton Street Brewery, maker of the Goose Island brand. The deal culminated in 2011’s purchase by A-B of the 58 percent it didn’t already own for $38.8 million. At the time, Fulton Street was producing 375,000 barrels a year, more than quadruple the volume when A-B originally entered the picture.
The popularity of craft beers has become an international phenomenon. The category now accounts for 11 percent of U.S. volume and continues to enjoy double-digit annual sales growth.