More Merger Mania

The recent pending InBev/AB deal not withstanding – and how interesting that has the potential to get – there has recently been a number of other mergers in the beer industry that absolutely merit notice.
 
First, the completion last week of the MillerCoors deal – called a joint venture. I am not sure about the actual hammers and nails of this – but it certainly gives the folks at AB something to think about. Frankly I was thinking things would go the other way, with AB taking a shot at InBev, not the other way round. Regardless, the MillerCoors deal definitely presents a new wrinkle for the competitive nature of the US macro beer market. The next few years will be fascinating as we watch these giants jockey for position. To the extent that AB/MillerCoors occupy each other’s attention, perhaps the craft segment can eke out continued growth in market share.
 
While it should be no surprise to anyone who has been following the AB craft entries of the last 10 years, the recent completion of the Redhook and Widmer merger (now called Craft Brands Alliance) is a bit of a curious development for me. I am just not sure what the net benefits are except perhaps to streamline some of the manufacturing and marketing operations, and clean up the paper work. The two companies have been closely aligned in distribution and manufacturing for years, so while the deal merits attention because it happened, I do not see it being a big deal.
 
The merger agreement between Pyramid and Magic Hat, however, promises to be much more interesting. I am assuming that it means, in addition to better purchasing economies of scale, that both entities will manufacture both product lines. This would improve price points for Pyramid on the east coast, and Magic Hat on the west. Just conjecture on my part, but seems to make sense.

So what a tangled web we weave… Seems like an awful lot of business going on. Think I’ll just go have a beer.

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Hugh Sisson, General Partner for Clipper City Brewing Co., LP