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Boston Beer Stock Climbs On Takeover Talk

September 27, 2017

Boston Beer’s share price rose 9% to $161.65 yesterday on analyst speculation that the pioneering craft brewer, which has struggled lately amid an influx of competition, could be snapped up by a larger rival. Credit Suisse analyst Laurent Grandet wrote in a note, “Although founder Jim Koch seems determined to turn the business around, we think the likelihood of a takeout goes higher if Samuel Adams rejuvenation efforts ultimately fail next year.” Grandet added that Molson Coors could be the most likely buyer of the ailing brewer. Molson Coors boosted its U.S. profile last year by acquiring full control of MillerCoors—its former joint venture with SABMiller—for $12 billion.

In July, Koch said that while Boston Beer’s depletion trends improved in the second quarter, “we remain challenged by the general softening of the craft beer and cider categories and a more competitive retail environment with a lot of options for our drinkers.” Boston Beer’s total volume was at 55 million (2.25-gallon) cases in 2016. The group’s Samuel Adams and Angry Orchard brands have been in decline lately, although its Twisted Tea and Truly Spiked & Sparkling labels have partially offset those struggles. For its full fiscal 2017, Boston Beer expects depletions to decrease by between 7% and 1%. Martin Roper, the company’s longtime CEO, is scheduled to retire next year.—Daniel Marsteller

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