Sam Adams Brewer Boston Beer Co. and Dogfish Head Merge to Create ‘Formidable’ Portfolio

Two of the most influential craft beer companies are now under the same ownership as Boston Beer Company and Dogfish Head Brewery announced their merger this week.

The merger creates a powerhouse of sorts as it slots the Dogfish Head brand within the impressive portfolio of Boston Beer, makers of Samuel Adams Boston Lager. Boston Beer CEO Dave Burwick will lead the company, while Dogfish Head co-founder Sam Calagione joins the board of directors of Boston Beer, a publicly traded company under the symbol SAM.

“We believe we are creating the most dynamic and diverse American-owned platform for craft beer and beyond,” said Jim Koch, Boston Beer founder and chairman. “Dogfish Head has a proud history as a craft beer pioneer with a brand that is beloved by American consumers and highly respected by the industry.”

Sam and Mariah Calagione, the Dogfish Head co-founders, took nearly all their merger consideration in SAM stock, becoming the second largest non-institutional stockholders, behind Koch. The Calagiones received approximately 406,000 shares of SAM valued at $314.60 per share, while Dogfish Head shareholders received $173 million in cash.

Sam Calagione will remain at the head of the Dogfish Head brand.

“This merger better positions Dogfish Head and our co-workers to continue growing within this definition for many years to come,” Calagione said. “In fact, Mariah and I believe so much in the future of our merged companies that we are all in, and personally we’re reinvesting nearly all of the proceeds back into the combined entity. We’re also proud to announce that we intend to devote a percentage of the Boston Beer stock that we receive to establishing a foundation and funding various local charitable programs.”

As carefully defined by the Brewers Association, the combined company will remain an independent craft brewery while being in a better position to compete against global companies operating within the craft beer space, including AB InBev, MillerCoors, Heineken, Constellation Brands, Mahou, San Miguel, and Duvel.

Those companies each own several craft brands, while other craft breweries have joined together to form consolidated companies with private equity, such as Southern Tier, Sixpoint and Victory, or Canarchy, the company made up of Oskar Blues, Perrin, Cigar City, Three Weavers, Deep Ellum, and Wasatch & Squatters. Recently a small brewery in California, Mammoth Brewing, acquired Nevada’s oldest brewery, Great Basin Brewing.

The Dogfish Head team will now be under the Boston Beer umbrella “as the companies expand opportunities for future innovation” in both beer and “beyond beer” products. Boston Beer’s “beyond beer” products currently include Angry Orchard, Twisted Tea, and Truly Hard Seltzer.

“This combination is the right fit as both Boston Beer and Dogfish Head have a passion for brewing and innovation, we share the same values and we will learn a lot from each other as we continue to invest in the high-end beer category,” Koch said.

With Dogfish Head’s “off-centered” portfolio of beers, including 120 Minute IPA, World Wide Stout, and SeaQuench, joining the already strong Boston Beer portfolio, Burwick said the merger creates a “formidable combination of brands.”

“United, we will have the highest quality, most distinct, high-end portfolio, from both a price-point and product perspective with the top-ranked sales organization to bring it to market,” he said. “We expect that we’ll see more consolidation in the craft industry over time, and we’ll be in the best position to take advantage of those changes.”