Author Topic: Dogfish is merging with Sam Adams  (Read 754 times)

Online Robert

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Re: Dogfish is merging with Sam Adams
« Reply #15 on: May 11, 2019, 03:03:03 PM »


Yeah, I think DFH Investors, LLC was the vehicle used by the private equity firm to purchase its 15% stake back in 2015.  I don't know how much they invested, but they're getting a cool $158 million.



Saw one report (Good Beer Hunting) that said the private equity firm (LNK Partners) has assisted DFH with a total investment of $145M, which doesn't initially make sense as the transactional value of their share of barrels of beer over the period was less than half that.  Now they've made good.  But I'm still confused, as the investments apparently were largely directed towards developing the hotel/restaurant end of DFH, and I'm not yet clear on where that business fits in the new set of structures.
Rob Stein
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Offline KellerBrauer

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Re: Dogfish is merging with Sam Adams
« Reply #16 on: May 12, 2019, 11:55:25 AM »
I think this merger is taking place because each brewery can capitalize on each other’s weakness.  In my opinion, no other brewery on the planet does lagers like BBC where lagers aren’t necessarily the strong side of DFH.  However, DFH does IPA’s and IIPA’s like no one else and these styles are a distant dream for BBC.  Each brewery has their strong points and each has their weakness.  Together they become even more of a powerhouse in the marketplace where competition is becoming quite steep.  Just a thought.
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Online Robert

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Re: Dogfish is merging with Sam Adams
« Reply #17 on: May 12, 2019, 12:15:24 PM »
I think this merger is taking place because each brewery can capitalize on each other’s weakness.  In my opinion, no other brewery on the planet does lagers like BBC where lagers aren’t necessarily the strong side of DFH.  However, DFH does IPA’s and IIPA’s like no one else and these styles are a distant dream for BBC.  Each brewery has their strong points and each has their weakness.  Together they become even more of a powerhouse in the marketplace where competition is becoming quite steep.  Just a thought.
That does highlight how they aren't in direct competition, and therefore can be partners to their mutual benefits.  It's not like one is trying to eliminate a threat to its share of shelf space and tap handles, as in so many takeovers by big beer.  What DFH really gains is BBC's sales and distribution strength, and what BBC gains is a BEER brand in its portfolio that is actually growing, whereas in recent years Sam Adams has been performing poorly and BBC's sales are almost entirely in the non-beer beverage brands. [EDIT note that this is precisely the set of mutual benefits cited in any "sellout" of a Goose Island,  Goldrn Road, etc. to big beer, but in this case we don't hate on either company.]  Sam and Jim seem to share a view that there is no longer any viability for midsize, regional or local breweries, and that only two types of entities can survive as primarily beer-focused enterprises:  hyper-local, tasting room-centered ventures, and companies too big to be swallowed by a multinational.  BBC was struggling with the beer-focused part, and DFH was stuck in the wrong size category.   But as to their hypothesis,  when ABI can eat SABMiller, and may be rumored to be eyeing Guinness, is there a size that's too big to swallow?
« Last Edit: May 12, 2019, 12:35:32 PM by Robert »
Rob Stein
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Offline Visor

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Re: Dogfish is merging with Sam Adams
« Reply #18 on: May 12, 2019, 02:31:58 PM »
   Scary thought, that. Sadly it's probably true, and we may live to see a world with one super mega-company and a bazillion small-ish locals.
I spent most of my money on beer, tools and guns, the rest I foolishly squandered on stupid stuff!

Online Robert

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Re: Dogfish is merging with Sam Adams
« Reply #19 on: May 12, 2019, 02:40:27 PM »
   Scary thought, that. Sadly it's probably true, and we may live to see a world with one super mega-company and a bazillion small-ish locals.
Look at the history of the industry (here, or abroad.)  It happens cyclically, several times over the last couple of centuries.   Except the last time around, really no tiny-and-locals survived, in the US at least, and it took a couple of decades for such entities to be reinvented.   So this time, on one view, it's a lot better.
Rob Stein
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Offline tommymorris

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Re: Dogfish is merging with Sam Adams
« Reply #20 on: May 12, 2019, 02:56:21 PM »
   Scary thought, that. Sadly it's probably true, and we may live to see a world with one super mega-company and a bazillion small-ish locals.
Look at the history of the industry (here, or abroad.)  It happens cyclically, several times over the last couple of centuries.   Except the last time around, really no tiny-and-locals survived, in the US at least, and it took a couple of decades for such entities to be reinvented.   So this time, on one view, it's a lot better.
...and homebrewing was illegal last time too. Now at least we can make our own beer.

Offline Visor

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Re: Dogfish is merging with Sam Adams
« Reply #21 on: May 13, 2019, 03:30:23 PM »
   Scary thought, that. Sadly it's probably true, and we may live to see a world with one super mega-company and a bazillion small-ish locals.
Look at the history of the industry (here, or abroad.)  It happens cyclically, several times over the last couple of centuries.   Except the last time around, really no tiny-and-locals survived, in the US at least, and it took a couple of decades for such entities to be reinvented.   So this time, on one view, it's a lot better.

   The last time around was an outlier in that the consolidation was Government caused via Prohibition, not competition or acquisition. I wonder how large Big Beer has to get before we start hearing serious talk about Trust busting, as we currently are with Fakebook. We may be getting close, IIRC ABI was required to essentially spin off Molsen/Coors before it was allowed to acquire SABMiller.
I spent most of my money on beer, tools and guns, the rest I foolishly squandered on stupid stuff!

Online Robert

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Re: Dogfish is merging with Sam Adams
« Reply #22 on: May 13, 2019, 04:03:32 PM »
   Scary thought, that. Sadly it's probably true, and we may live to see a world with one super mega-company and a bazillion small-ish locals.
Look at the history of the industry (here, or abroad.)  It happens cyclically, several times over the last couple of centuries.   Except the last time around, really no tiny-and-locals survived, in the US at least, and it took a couple of decades for such entities to be reinvented.   So this time, on one view, it's a lot better.

   The last time around was an outlier in that the consolidation was Government caused via Prohibition, not competition or acquisition. I wonder how large Big Beer has to get before we start hearing serious talk about Trust busting, as we currently are with Fakebook. We may be getting close, IIRC ABI was required to essentially spin off Molsen/Coors before it was allowed to acquire SABMiller.
The last time around was partially precipitated by failures to survive prohibition, but also depression and wars that stressed the industry here and abroad.  But the biggest consolidation, worldwide, was business driven and post war.  So not entirely unlike other cycles.  Yes, before regulators would allow ABI's acquisition of SABMiller, they had to sell off the Miller brands in the USA and Canada to MolsonCoors, with whom SABMiller already had a joint production arrangement anyway.   So almost more trust shifting than trust busting.
« Last Edit: May 13, 2019, 04:09:11 PM by Robert »
Rob Stein
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Offline Visor

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Re: Dogfish is merging with Sam Adams
« Reply #23 on: May 14, 2019, 03:20:35 PM »
   Or trust limiting, a duopoly or oligopoly instead of a monopoly?
   Speculating on alternate historical outcomes obviously proves nothing, but I personally think a great many of the American breweries that were extant at the start of prohibition would have survived the economic and political upheavals of the thirties and forties if they hadn't been forced by prohibition to suspend their business activities for more than a decade. The reason Coors, Bud and the other giants survived, albeit as mere shadows of their former selves, was because they were so large that they had other niches to exploit. IIRC Coors relied heavily on Coors Porcelain while also producing food items such as malted milk powder. In some ways it was almost inevitable that the survivors of prohibition would become giants that dominated the market after the war, the bar to re-entry was too high for most little guys, both in terms of capital costs and in terms of recruiting experienced help - when an occupation is banned for more than a decade the people who formerly plied the trade must move on to other work. What wasn't inevitable was how long the biggies were able to own the market.
I spent most of my money on beer, tools and guns, the rest I foolishly squandered on stupid stuff!