Tues News Two – Heineken Acquires Final 50% of Lagunitas

Seeking AlphaLast Thursday, European brewing giant Heineken (OTCQX:HEINY) (OTCQX:HKHHY) announced it was acquiring the remaining 50% stock of Lagunitas Brewing Company. Going forward, Heineken will own and operate what was previously America’s sixth-largest craft brewer. Heineken originally acquired a 50% stake in the California-based firm in 2015 and will now take complete control. Financial terms of the deal weren’t disclosed.

Alright so this is another one that came out last week and I decided to let it simmer until my convenient segment, #TuesNews.

Lagunitas is the 6th largest craft brewery in the United States, for those unaware. It is quite large when I am sitting on the East Coast, enjoying and able to see all of their brews from the West Coast.

Back in 2015, Heineken purchased a 50% stake in Lagunitas. I honestly don’t remember that acquisition as I was only 23, struggling to put food on my table as a post-grad living alone with debt, and just starting to really delve into that #CraftBeerLife. But being where I’m from and having a big business brain, I could tell that Lagunitas was owned or backed by somebody larger than life. Just didn’t take the time to know who.

Now, fast forward to 2017, and Heineken completed the deal, acquiring the final 50% of Lagunitas for an undisclosed price. My assumption is because of the increase in sales, Heineken paid a premium compared to the previous 50% back in 2015.

My take on this acquisition is a lot different than Wicked Weed. Wicked Weed was not as large, was controlled solely by sole proprietors, maybe a few angel investors here and there, but was marketed as a craft beer company that was brewed locally for locals. Lagunitas I feel has always had bigger dreams, aiming to be the #1 Craft Brewery in the United States. It’s been 2 years since they have been backed by “big beer”, so this one only makes sense because they are already soiled with that bad blood. No sweat off my back.

I do enjoy Lagunitas beers though. They have some funny names, good taste, and can be found somewhat easily even on the East Coast. Heineken is large, yes, but it isn’t AB InBev large and Neil Patrick Harris does their advertising, so imagine him holding up “A Little Sumpin’ Sumpin'” during the next Super Bowl.



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