One of craft beer’s largest remaining truly independent craft breweries has become the next major domino to fall in the industry’s on-going saga of mergers and acquisitions. Earlier this May, two craft beer titans in Boston Beer and Dogfish Head announced a major merger that changed the landscape of American craft beer, but today’s announcement may have an even larger impact.

Long regarded as one of the original vanguards of craft beer’s upstart independent movement, New Belgium Brewing, which was founded in 1991 in Fort Collins, CO, announced today that it has agreed to a 100% cash acquisition by Lion Little World Beverages, the craft beer arm of Kirin Holding. That 100% acquisition would push New Belgium out of the Brewers Association’s definition of an independent craft brewery. The transaction is expected to close by the end of the year pending approvals by regulators and the Employee Stock Ownership Plan (ESOP) in addition to other closing conditions.

Lion Global Markets, which was launched in 2015, was originally tasked with growing Kirin’s portfolio within the craft beer and cider segment in New Zealand and Australia. In May, they hired Simon Thorpe, former CEO of Pabst Brewing to serve as Managing Director of their craft beverage program. Thorpe also has previous experience as President and CEO of Duvel Moortgat for seven years, during which time, he helped oversee the acquisitions of Boulevard Brewing and Firestone Walker.

Today’s acquisition isn’t Kirin’s first foray into the American craft beer segment. In 2016 Kirin acquired a 24.5% in Brooklyn Brewing which has since formed a strategic partnership with California’s 21st Amendment Brewing and fellow Fort Collins brewery, Funkwerks.

Kirin has announced that New Belgium will remain headquartered out of Fort Collins, CO and that New Belgium founder, Kim Jordan, CEO Steve Fechheimer, and the rest of the management team will both stay on board and “will remain deeply involved with the company, and also play a key advisory role in collaborating alongside other leading founders within the Lion Little World Beverages network”.

Jordan stated, “If there are three things we’re known for at New Belgium, it’s our dedication to innovation and excellence in beer, our commitment to the culture and wellbeing of our co-workers, and our crazy enthusiasm for being a business role model. We were thinking about these three things as we began to explore being a part of the Little World family.”

“We’ve been pushing the boundaries of beer innovation as pioneers for almost three decades. Little World are brewers’ brewers and we have really felt their commitment to this ancient craft. We’re absolutely excited about helping to build a collective of breweries – each with their own vibe – who share the same commitment to delighting beer drinkers with great beer, great businesses, and great collaboration among us.”

Last year, New Belgium Brewing produced 845,000 barrels of beer and was the fourth-largest craft brewery in the country. They now have a second taproom and brewery in Asheville, NC, which opened in May 2016, as well as a small experimental brewery in Denver’s The Source Hotel, and in August 2017 announced the acquisition of San Francisco’s Magnolia Brewery. They have also licensed New Belgium beer bars at Denver’s The Source Hotel and two outposts in Denver International Airport.

Matt Tapper Managing Director of Lion Little World Beverages spoke on their opportunity to build out a bigger craft beer network.

“Our owner, Kirin, has entrusted Lion with leading its global craft beer strategy and today’s announcement is a real milestone for us,” said Matt Tapper. “Over time, we see a great opportunity to work together with New Belgium Brewing to grow a wider portfolio of craft beverages in the U.S., and build on the great business that Kim, Steve and the entire New Belgium team have created.”

Kim Jordan announced today’s acquisition via the New Belgium website in an open letter to their fans. In the letter, she notes that while the acquisition does mean that the brewery will no longer be employee-owned, that nearly $190 million will go toward paying out current and former employees with nearly 300 employees receiving upward of $100,000 toward their retirement packages. Jordan also cites similar interests in preserving New Belgium’s B-Corps status and approach toward brewing as reasons for alignment. It is important to note that due to the company’s ESOP status, its employees will still have to conduct a final vote on the acquisition in the coming weeks.

You’ve probably read the big news that New Belgium Brewing is set to join Lion Little World Beverages– the global craft beer division of Australasian brewer, Lion, which is part of Kirin. I’m assuming you’re here to learn more. If there are three things we’re known for at New Belgium, it’s our dedication to innovation and excellence in beer, our commitment to the culture and well-being of our coworkers and our crazy enthusiasm for being a business role model. We were thinking about these three things as we began to explore being a part of the Little World family. Lion, Kirin, and the Little World team liked that about us, and that paved the way for this decision.* We are a Certified B Corp. Which means that we’re dedicated to being a force for good as a business. Right away, the folks at Little World told us that they were captivated by this model, and they are asking us to retain our B Corp status. In addition, Lion announced last week that they’ve made a pledge to be carbon neutral in their Australian and New Zealand breweries starting in 2020. That’s exciting! And now we will be accelerating our own journey toward Carbon Neutrality. Imagine a world where publicly traded companies are dedicated to business as a force for good, taking into account an array of stakeholders- their workers, their shareholders, and the environment. This is a model for a big, compelling future and is in line with the needs of our rapidly changing world. We’ve been brewing eclectic Belgian style beers, aging beer on wood, and generally pushing at the boundaries of beer innovation as pioneers for almost three decades. Little World are brewers’ brewers. They loved the sour beers from our renowned wood beer cellar! When we noticed that they were really interested in the breadth of our beer portfolio, and they began to share stories about their own innovation, we felt their commitment to this ancient craft. They are as devoted as we are, and their resources in R&D and innovation can only help to grow our own capabilities. We will no longer be employee owned and it would be easy to see that as a drawback. But here’s another way to look at it. More than 300 employees are receiving over $100,000 of retirement money with some receiving significantly greater amounts. Over the life of our ESOP, including this transaction, the total amount paid to current and former employees will be nearly $190 million. We will have helped a significant number of people realize the upside of having equity in something, being a part of the American Dream! Little World is committed to strategies to broadly share the wealth going forward, like profit sharing, best-in-class healthcare and a generous family leave policy. Our on-site wellness clinic will carry on. Continuing to practice the rest of what makes New Belgium so cherished by its coworkers: a playful, loving vibe, a culture that encourages learning and experimentation, and an entrepreneurial spirit, will be up to all of us. We are more than up for that challenge and Little World will support us all the way. We all know the world of craft brewing is dynamic. In the US, the number of breweries has nearly doubled in the last four years to 7,500. At New Belgium, we’ve needed to balance the cash demands of our ESOP and selling shareholders, with the operational need for more capacity (hence the brewery in Asheville) and the need to grow our brand by reaching more beer drinkers with our brand message. These are a lot of competing priorities and it has been difficult to do all of them as well as we’d like. As we surveyed the landscape over the last several years, we found that options to raise capital while being an independent brewer weren’t realistic for us. Some of the most widely used options by craft brewers were going to compromise a lot about what makes New Belgium great; environmental sustainability, and a rich internal culture. Some of these were going to lead to cost-cutting or a lack of focus on sustainability. Having the support and resources of Lion Little World Beverages, allows us to attend to those competing priorities and utilize our brewery capacity to its fullest. Joining Little World Beverages to anchor a US Craft Beer platform is so congruent with all the things we’ve committed ourselves to at New Belgium that we jumped at the opportunity to offer this to our shareholders. We’re thankful for Lion and Kirin’s support of our values and I’m excited to help to build a collective of breweries along with the management of New Belgium, who share the same commitment to delighting beer drinkers: with great beer, great businesses and great collaboration amongst us. Of course, there are always people to thank: boundless thanks to all our passionate customers: you smuggled beer across state borders a la Smokey and The Bandit, you got tattoos, you make our hearts swell with pride with your care. To our retailers and distributors: nothing we’ve done could have been done without you, huge props! To all of our friends inside the craft brewing industry and in so many other places, thank you thank you –we treasure your friendship now and in the future. And last, but certainly not least to our amazing New Belgium Family, what can I say, but we have created the most loving, curious, warm, interesting fun thing together and I burst with pride every day. This is not the last chapter, there’s more fun to be had. We can’t wait to see what happens next. We are as committed to being a vibrant, values-driven enterprise as we’ve ever been, and we look forward to having a beer with all of you along the journey! Here we go. Much love, Kim