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AB InBev sells bundle of beer and drinks businesses to Tilray
AB InBev has agreed to sell eight beer and drinks brands from its portfolio to the cannabis company Tilray Brands, Inc.
The deal has been lined up to elevate Tilray Brands towards becoming the fifth-largest craft beer business in the US, up from ninth overall, according to data from the Brewers Association. With the new deal, Tilray Brands has said it will triple its beer production from 4 million cases per year to 12 million.
According to a statement released by Tilray Brandsconfirming the acquisition, the brands it will acquire as part of the sale will include: Shock Top; Breckenridge Brewery; Blue Point Brewing Company; 10 Barrel Brewing Company; Redhook Brewery; Widmer Brothers Brewing; Square Mile Cider Company and HiBall Energy.
In the 2022 GABF Competition, the largest professional beer competition in America, Breckenbridge Brewery won a bronze medal in the American wheat beer category for its popular Agave Wheat beer, showcasing how the brewery is revered within its sector.
Despite the official sale price remaining undisclosed, the acquisition has been rumoured to be set at around US$85 million, according to a filing made with the Securities and Exchange Commission. The deal is also being touted to include current employees as well as all brewery production sites and brewpubs associated with the brands.
During a call with investors, Tilray Brands revealed that the move better positions the company in its growth strategy and will help it to expand its business across the US.
Once all details are finalised, the acquisition is expected to be completed in the next 60-90 days, effectively before the end of the year.
Last November, Tilray Brands acquired Montauk Brewing Company in another move that the company stated would assist in expanding its reach across the US. The deal saw Montauk Brewing joining SweetWater, Green Flash, and Alpine brands as the cornerstones of Tilray’s craft beer segment and as a result offered Tilray a stronger footprint in the northeast.
Historically, AB InBev and Tilray have had close liaisons and have worked together to co-research non-alcoholic drinks containing THC and CBD to guide their future decisions. A few years ago, AB InBev and Tilray Brands also each invested US$50 million each in a new research partnership to develop a “deeper understanding” of the cannabis beverages category in order to “guide future decisions”. A decision that now looks like this acquisition has been a long time in the pipeline and is part of a broader plan.
The latest move by AB InBev to effectively offload craft breweries to Tilray has, since news of the deal broke this week, been rumoured by industry sources to be part of a longer-term strategic agreement to further the cannabis industry’s reach via an already established craft beer network. A decision that could assist both parties to tap into credible longstanding relationships via the craft side of the industry to approach retail, on-premise and a similar target market with the kudos of revered brand names. However, sources also stated that they are also “dubious the move could steal market share from beer” and ultimately cannibalise the craft beer industry as a result – something that the sector has hinted it remains “cautious” about and “more than a little concerned about the motives guiding the new deal”.