Tilray Brands (NASDAQ: TLRY) has revealed its engagement in a definitive agreement to acquire eight beer and beverage brands from Anheuser-Busch (NYSE: BUD). Following the fulfillment of standard closing prerequisites, Tilray will take ownership of an impressive roster of brands, including Shock Top, Breckenridge Brewery, Blue Point Brewing Company, 10 Barrel Brewing Company, Redhook Brewery, Widmer Brothers Brewing, Square Mile Cider Company, and HiBall Energy.
The fiscal exchange will be carried out in cash reportedly for total consideration of $85 million, and the finalization of the agreement is anticipated by September 2023, as per an announcement by Tilray.
“Today’s announcement both solidifies our national leadership position and share in the U.S. craft brewing market and marks a major step forward in our diversification strategy,” said Tilray CEO Irwin D. Simon. “Leveraging the deep CPG expertise of Tilray’s leadership team and acquisition integration track record, we intend to drive both revenue and cost synergies, while significantly expanding national distribution to coveted markets across the U.S. and internationally.
Following the news, Tilray’s shares jumped over 12% in pre-market trading.
Andy Thomas, the President of the Anheuser-Busch unit overseeing premium brands and craft brewers, elucidated that Tilray initiated contact them earlier this year, expressing a keen interest in the brands and breweries. Thomas assured that Anheuser-Busch remains steadfast in its commitment to other craft beer brands within its portfolio.
“With this transaction, our beer business is expected to triple in size from 4 million cases to 12 million cases annually,” said Ty Gilmore, President, U.S. Beer at Tilray.
This divestiture by Anheuser-Busch follows a prior workforce reduction in its U.S. offices in July, driven by a prolonged decline in sales of its Bud Light brand. The popularity of Bud Light has dwindled significantly since April, stemming from a commercial controversy linked to a promotion involving transgender influencer Dylan Mulvaney. In a recent development, Mexican label Modelo Especial overtook Bud Light as the highest-selling beer in the United States.
Tilray’s strategic involvement in alcoholic beverages has been steadily expanding. In a prior instance in November, Tilray had entered into an agreement to acquire Montauk Brewing, a craft brewer and hard seltzer producer. This latest acquisition is expected to elevate Tilray to the position of the fifth-largest craft beer producer in the United States, securing a 5% market share.
The news follows the recently shareholder-approved acquisition of Hexo Corp by Tilray for $56 million, bringing to an end the story of yet another cannabis company in the Canadian landscape as consolidation continues in an effort to achieve profitability.
Information for this briefing was found via The Wall Street Journal, Edgar, and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
