BREW Stock Soars on Big Acquisition News: BUD Extends Partnership

BREW stock

BREW stock is the biggest gainer in Tuesday’s trading session after Anheuser-Busch InBev (NYSE:BUD) said that it will buy the remaining 68.80% of Craft Brew Alliance Inc (NASDAQ:BREW) that it doesn’t already own for $16.50 a share.

Big News for the Industry

In a move that will further boost the market share of Budweiser’s parent company and the world’s biggest brewer, Anheuser-Busch InBev SA, the company is preparing to acquire several craft beer brands. More importantly, the company announced on Monday that the acquisitions will be made at a discount when compared to the price of the brands a few months ago. As per the announcement, Anheuser-Busch is all set to buy a range of beer brands that will include companies like Kona Brewing Co and Craft Brew Alliance Inc.

The Budweiser maker stated that it is planning to acquire almost 70% of Craft Brew Alliance by paying $16.50 per share. It should be noted that it already owns a chunk of the company. The offering made by Anheuser-Busch is around twice the current stock price of Craft Brew, but it should be noted that BREW was trading at a much higher price in July.

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BREW stock tanked in July after Anheuser-Busch refused to acquire Craft Brew at that time after having agreed on a deal.

The two companies had first agreed on a longer-term association back in 2016, and it had also been agreed that Anheuser-Busch was going to acquire Craft Brew in three stages. It had to pay $22 a share in the first instance, then $23.50 a share in the second year, and $24.50 per share in the third year. However, that deal is no longer in place. According to reports, Anheuser-Busch is going to pay cash for the acquisition of the remaining shares, and a deal could be closed at some point in 2020. That being said, it should be noted that the other shareholders in Craft Brew Alliance would need to approve the deal if it is to go through.

At the time of writing, BREW stock is up 121.70% at $16.25.

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Featured image: DepositPhotos © NatashaFedorova

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