Redhook Ale Brewery shareholders on Tuesday blessed the company's merger with Widmer Brothers Brewing, of Portland, and the deal is expected...
Redhook Ale Brewery shareholders on Tuesday blessed the company’s merger with Widmer Brothers Brewing, of Portland, and the deal is expected to close next Monday or Tuesday.
“This is a smokin’ good deal,” co-founder and Chief Executive Paul Shipman told a few dozen shareholders at its annual meeting in Woodinville.
The deal has taken longer than expected to pull together, he said, partly because the companies discussed various ways to structure the merger. They settled on a 50/50 division of ownership between the companies’ existing shareholders.
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That required Redhook shareholders to approve the issuance of about 8.4 million shares, worth $36 million Tuesday, to be given to Widmer’s roughly 30 shareholders. More than 98 percent of Redhook’s voting shareholders approved the issuance.
The new company will be called Craft Brewers Alliance and trade under Redhook’s ticker symbol, HOOK. It will be headquartered in Portland and run by co-CEOs David Mickelson, who is Redhook’s president and chief operating officer, and Terry Michaelson, president of an existing joint venture between the companies.
Shipman will become chairman emeritus and receive a salary of $90,000 for consulting up to 180 days during the first year after the merger. Some shareholders gave him a standing ovation at Tuesday’s meeting, after which Shipman quipped, “The people who stood bought the stock below the current price.”
Redhook’s profitability and share price have suffered for years because of competition and its own overbuilding in the 1990s.
Widmer has been profitable for at least the past five years, although its 2007 profit was negligible. The breweries are merging at a time of massive consolidation in the beer industry.
“You either get bigger or go away,” said shareholder Mel Nordberg, of Seattle, who is a former food broker. “The big guys will eat up your [grocery] shelf space, and it’s becoming more expensive to hold those spots.”
A Vermont brewery said in April it plans to acquire Seattle’s only other publicly traded beer company, Pyramid Breweries.
Widmer already owns about 20 percent of Kona Brewing in Hawaii and 40 percent of Goose Island Beer in Chicago.
Even the giant brewer Anheuser-Busch, which owns roughly a third of Redhook and Widmer and will own that much of the new corporation, has become the target of an unsolicited takeover bid.
Redhook officials said they have no inside information about whether InBev of Belgium would succeed, but Shipman said, “If we find ourselves with InBev people as our partners, I think it would go fine.”
Melissa Allison: 206-464-3312 or email@example.com