Quantfury Gazette

Boston Beer (NYSE: SAM) gets unusual takeover offer with promise of greener fields

by
Nathan Crooks
Quantfury Team
boston beer

Boston Beer (NYSE: SAM)—the American brewer best known for its Samuel Adams and Truly brands—could suddenly be at the center of a very unusual bidding war as it faces declining sales and shares that had fallen 25% this year. The company was already reported to be in talks about selling itself to the Japanese owner of Jim Beam whiskey, but it’s now got another offer to consider, straight out of left field. 

Ben Kovler, the CEO of cannabis firm Green Thumb Industries who’s styled himself as a cross between legendary investor Warren Buffett and Grateful Dead frontman Jerry Garcia, entered the fray and says he has a better idea and “more valuable” offer for shareholders. Beer sales are declining across the board as younger drinkers change their tastes or eschew alcohol altogether, and Kovler thinks his firm would be a more appropriate match to help Boston Beer capitalize on the changing times. 

“Young people are drinking less,” Kovler wrote in a letter to Boston Beer founder and craft brewing hero Jim Koch, pointing out that a combined balance sheet could provide $1 billion for additional acquisitions or share buybacks. “Sometimes you have to close your eyes and use your imagination to play in the future.”

Indeed, overall beer sales volume fell more than 5% last year as health-conscious Millennials and Gen Z boost “sober curious” trends by trying out new “adaptogenic” drinks that contain herbs and botanicals but forgo the alcohol. Multinational brewers Anheuser-Busch Inev (CBOE: ABI), Ambev SA (NYSE: ABEV) and Molson Coors Brewing (NYSE: TAP) have all seen their shares decline this year. In its last earnings report, Boston Beer noted that distributors had been selling less of its products, even though it’s been able to increase revenue by raising prices. 

Although it’s uncertain if Green Thumb could obtain approval for a possible transaction—since marijuana remains illegal at the federal level in the US—Boston Beer shares have surged 14% amid all the drama. Osaka-based Suntory Holdings, the possible suitor in Japan, has denied that it’s in talks with the company. 

Whatever happens, shareholders are just along for the ride as Jim Koch, the company’s founder, owns 100% of the shares with voting rights and will get to decide what happens. While there still might be a nice exit this time around, the overarching messaging for other, much larger alcoholic beverage companies is clear: beware of changing tastes and times.

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