Pabst Deal Closes

News comes Friday that the Pabst deal is final. Connecticut investor C. Dean Metropoulos bought the company from the Kalmanovitz Charitable Foundation for an undisclosed price; the erstwhile chairman of Pabst, Lou Giraudo, would only say that the speculated price of about $250 million was incorrect. Metropoulos made no comment.  A Reuters story said that "The foundation listed its total assets as $62.3 million in its tax return for the year ending June 30, 2008." The story also noted that

"Sales of Pabst Blue Ribbon in food, drug and other retail outlets rose 33 percent to about $172.7 million in the 52 weeks ending April 18, The Wall Street Journal has reported, citing data from market research firm SymphonyIRI Group." 

So that's done. Now we'll see what the Pabst drinkers -- the reputed hipsters and bike messengers -- are going to do. I suspect they're going to keep drinking Pabst.

Pabst finally, almost, probably...sold

After years as the property of a charitable institution, Pabst Brewing looks likely to be sold to C. Dean Metropoulos. The Wall Street Journal reports that Metropoulos will be paying the Kalmanovitz Charitable Foundation about $250 million for the company, a collection of brands and employees that owns no brewing facilities (Pabst's brands are all brewed under contract). Here's the nut of the story for those who are not WSJ subscribers:

Investor C. Dean Metropoulos made a fortune building well-known consumer brands including Bumble Bee Tuna and Vlasic Pickles. Now, he is looking to wash them down with a Pabst Blue Ribbon.
Mr. Metropoulos, a 64-year-old executive known for invigorating brands, has reached an agreement to buy Pabst Brewing Co. from the charitable foundation that owns the company for about $250 million, according to people familiar with the matter. Although little known outside of food circles, he earned a fortune managing brands such as Chef Boyardee, Duncan Hines and Ghirardelli Chocolates. With Pabst, Mr. Metropoulos is showing his deal-making skills.
About 15 other private-equity firms, including Morgan Stanley's private-equity arm, had considered a bid, said people familiar with the matter. The purchase is in its final stages and has the financial backing of General Electric Co.'s lending arm, the people said.
Pabst Brewing is the country's fifth-largest beer supplier, according to industry newsletter Beer Marketers Insights Inc., accounting for 2.7% of industry volume last year. Pabst's blue-collar roots have made the brand-known among beer cognoscenti as PBR-a beer of choice for a generation of irony-loving hipsters from Portland, Ore., to Manhattan's Lower East Side.

It's just me, but if Mr. Metropoulos really wants to "invigorate" this brand...he should buy/build a brewery for it. Give Pabst a home, Mr. Metropoulos; give it back its soul. And maybe give it back some hops while you're at it.

Pabst and The King

The InBud deal is bringing some strange stuff to the surface. Pabst felt the need to release a statement yesterday that initially read like this:

In response to the many inquires we have received regarding the acquisition of Anheuser Busch by InBev: No doubt, the AB-InBev combination will create a formidable competitor. And it is true, Pabst Brewing Company will be the last of the famous iconic U.S. brewers to be fully independent and American-owned.

As a Pennsylvanian, Yuengling is pretty iconic to me, but I'll admit that's a parochial attitude. Still..."In response to the many inquiries"? Hoo boy.

Then, of all people, Michael "Eulogy" Naessens released a statement on the deal...since he's Belgian and a CPA. Who knew? I had to chuckle over this bit, though:

“Budweiser was the king of beers when the U.S. beer market was an absolute monarchy and people had little choice. Now it’s more like a constitutional monarchy, with craft beers leading the revolution.” says Naessens.

Hail to The King, baby!

Biggest American breweries? Right here in PA, baby

In a conversation on Uncle Jack's blog, he and I realized that the biggest production facilities of the two largest American-owned breweries (well, once A-B actually gets bought by InBev, that is, and as opposed to beer marketing companies, like Pabst) are right here in Pennsylvania. That would be the newly operational "Upper Macungie" brewery of Boston Beer in Fogelsville, PA, and the St. Clair brewery of D.G. Yuengling & Son -- "America's Oldest Brewery™" -- outside of Pottsville, PA. (Before we get into it...yes, there's a certain amount of interpretation here: BBC makes about 1/2 of their beer under contract. There is, however, no doubt that they are the two largest breweries, so I'll leave it up to barroom conversation to make the final call.)

As I said there, this could potentially be huge for Yuengling, if they capitalize on it. And if I were Pabst...I'd get my ass out there beating the bushes to buy a brewery post-haste and become America's largest brewery. Pabst: still an icon, still American-owned, and just one brewery short of being what their drinkers want them to be: honest. Hmmm...City Brewing, Latrobe? Wouldn't that be sweet? After all, Pabst used to own that Upper Macungie plant, their last. Time to put together a deal, gentlemen.