In early 1998, Pete’s Brewing Co., one of the most successful small-scale brewing operations in the United States, went looking for smaller fry to acquire. Then its investment bank, Morgan Stanley, called to say that a bigger fish was looking to gobble Pete’s.
That bigger fish was Gambrinus, the San Antonio-based firm best-known then as the importer of Corona and already the owner of the BridgePort Brewery of Portland, OR, and Texas’ Spoetzl Brewery of Shiner Bock fame. An affiliate of Gambrinus offered Pete’s $69 million in cash, or $6.375 a share at a time when Pete’s shares were trading at around $5.80 each.
The deal closed 16 years ago this month. It’s a milestone to keep in mind as more larger breweries acquire their smaller counterparts, such as Anheuser-Busch InBev’s February takeover of Blue Point on Long Island and Duvel Moortgat’s purchase of Kansas City-based Boulevard Brewing a few months before.
That is because Gambrinus’ acquisition of Pete’s was particularly auspicious. Pete’s various offerings were some of the best-selling smaller-batch beers ever in the U.S., especially its Wicked Ale, a brown ale that namesake and co-founder Pete Slosberg stumbled upon while trying to clone Samuel Smith’s Nut Brown Ale. Pete’s, along with rival Boston Beer Co., makers of Samuel Adams, accounted for more than one-third of all “craft” beer produced domestically by the early 1990s; they were the gateway brews for such beers at a time when that segment of the brewing industry was growing exponentially.