Reports: New Belgium exploring sale

ASHEVILLE - International news agency Reuters reported Friday that the employee-owned New Belgium Brewing Co. is looking for a buyer that could value the U.S. company at more than $1 billion.

Citing only "sources," Reuters reports that advisory firm Lazard Middle Market is advising New Belgium on the "potential sale."

In an emailed statement, founder and board chair for the brewery Kim Jordan said, “New Belgium Brewing’s Board of Directors has an obligation to have on-going dialogue with the capital markets with the goal of making sure that we remain strong as leaders in the craft brewing industry.”

Jordan later clarified through a spokesman that "there is no deal pending at this time."

In an October interview with Shanken News Daily, a wine, spirits and beer trade publication, current New Belgium CEO Christine Perich said the brewery would experience its first down year in 2015, having pulled back on its production.

“Last year, we grew substantially and it was semi-painful for us. We’re at maximum capacity in Fort Collins and we’re trying to get Asheville up and running so we’ve been very thoughtful about how we manage volume this year,” she told the publication.

“We’re using a lot of our resources in Fort Collins to get Asheville going, so we couldn’t have the pedal down as hard as we did last year. Beyond 2016, we’ll have the capacity in Asheville and the ability to ramp up that site.”

The brewery is known throughout the country for its Fat Tire Amber Ale. As of 2012, it was the fourth-largest craft brewery and eighth-largest overall brewery in the United States, according to The Brewers Association.

Christine Perich has been leading the company since Kim Jordan, a co-founder of New Belgium, stepped down as CEO in October. Jordan was to become executive chair of the brewery’s board of directors.

Potential sale impact

Given that New Belgium is entirely owned by its employees, it's hard to say how a sale would impact the local operation and the 80 employees it planned to have on board by spring of 2016.

It’s likely employees of New Belgium would have to vote on a sale.

Craft brewer Full Sail Brewing in Oregon is 58 percent employee-owned. In May, employees voted to sell it to a private equity firm. At the time, The New School, an industry publication in the Northwest, reported employees were – based on their time at the company – likely to earn four to five figures in the buyout and retain their jobs.

New Belgium is close to completing its East Coast brewery along the French Broad River in West Asheville. The first batch of test beer is churning its way through the brewery, and the company plans to be producing ales for sale in early 2016.

New Belgium has invested $140 million on revitalizing the brewery site, a former brownfield site once used as the Asheville stock yard. New Belgium received tax dollar grants and incentives from Buncombe County worth up to $8.45 million, and city incentives of $3.5 million. In exchange, the company pledged to create 130 local jobs with an average annual wage of $50,388.

In 2023, a second phase of incentives would be paid out if the brewery creates 24 more local jobs and invests a total of $175 million into its facility.

In addition to the brewery's significant construction costs, New Belgium has invested in several community projects, including $50,000 toward a bicycle climbing lane and new sidewalk along the northern (uphill) side of Haywood Road.

Asheville Mayor Esther Manheimer said Friday afternoon she had not heard about any potential sale of New Belgium.

“Companies get bought and sold all the time and don’t notify the mayor,” Manheimer said.

As far as incentives, Manheimer noted that economic incentives employers receive are based are meeting staffing and salary levels. Basically, companies can’t utilize incentives if they don’t meet the goals.

Part of New Belgium's incentives package required the company pay all employees a living wage.

Manheimer, an attorney, said she would assume that any agreements New Belgium has entered into with the city would transfer to a new owner.

At this point, the mayor said, she’s not “overly concerned” about the sale news, in part because she would expect New Belgium to notify the city if a sale may alter its plans for hiring or production levels.

“To me a corporate transfer doesn’t necessarily mean anything about the experience our city will have with this company,” Manheimer said. “It may just mean a change in ownership. It may not mean a change in the employees or the number of employees they plan to hire or their agreements. It may have no implications in terms of their agreements with the city.”

Asheville City Councilman Cecil Bothwell said he had not heard of any impending sale, either, but the potential raises concerns for him.

“I’d have to imagine that any sale of that magnitude implies a major corporate buyer,” Bothwell said, noting that major corporate brewers have found themselves “threatened by the craft brew industry as indicated by the Coors closure in eastern North Carolina.”

He also raised concerns about wages.

“A sale could mean a shift away from worker-owned, as we witnessed with Blue Ridge Paper some years ago—and that could have negative implications for the workforce going into the future,” Bothwell said. “If they aren’t going to be a living wage employer as we anticipated, that would be a very distressing outcome for Asheville.”

The Coloradoan staff contributed to this report.