PORTLAND, Ore. (AP) - Redhook Ale Brewery Inc. said Tuesday it is combining
with privately held Widmer Brothers Brewing Co. to create one of the nation's
largest specialty brewers.
The all-stock transaction will result in Widmer shareholders and Redhook
shareholders each holding about 50 percent of the outstanding shares in the
combined company, which will be called Craft Brewers Alliance Inc. and trade
under Redhook's stock symbol, "HOOK."
Each Widmer share will be converted into the right to receive 2.1551 shares
of publicly traded Redhook common stock, Redhook said in a filing with the
Securities and Exchange Commission. Anheuser-Busch Cos. has held a minority
stake in both companies and will have one in the combined company.
Widmer, based in Portland, and Redhook, based in Woodinville, Wash., have
worked collaboratively for years, with a brewing and licensing relationship in
the eastern U.S. They also operated a joint sales and marketing operation called
the Craft Brands Alliance.
"It's going to be huge news in the beer world," said Paul Gatza, director of
the Brewer's Association, a national trade group. "Both were very strong
pioneering companies."
In 2006, Widmer was the 11th largest brewer in the U.S. based on sales, and
Redhook was the 12th largest, according to the association's rankings.
Their beers will remain separate brands.
"If anything happens, the beers will only get better," said Paul Shipman,
founder and chief executive officer of Redhook. "And they are already pretty
darn good."
There has been much consolidation in the beer industry but little in
specialty or craft brewers. The companies said they expect to benefit from their
combined brewing experience, distribution service and other benefits of size.
"We've been pretty closely connected for a long period of time. The biggest
hurdle is already overcome," said Kurt Widmer, one of the founders of Widmer.
The combined company will maintain breweries in Portland, Woodinville and
Portsmouth, N.H. It will have management offices in both Portland and
Woodinville.
Kurt Widmer will serve as chairman, and Shipman will be chairman emeritus.
The company will have co-CEOs: Dave Mickelson, Redhook's current president, and
Terry Michaelson, president of Craft Brands Alliance, the existing joint
operation.
The deal requires the approval of Redhook shareholders and regulators.
Redhook shares fell 2 cents to $6.10 Tuesday before the deal was announced.
They were unchanged in after-hours trading.
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