Boston Beer signs deal to buy brewery

August 2nd, 2007 | Posted by Real Beer

The Boston Beer Co., brewer of Samuel Adams beers, said Thursday it has signed a purchase and sale agreement with Diageo North America to acquire a historic brewery in the Lehigh Valley area of Pennsylvania.

Boston Beer chose this acquisition over building a new brewery in Freetown, Mass., where it had entered into an agreement with an option to purchase a parcel of land.

However, after a $4 million evaluation of the cost of constructing a new brewery, Boston Beer has decided that route would not be the company’s best long-term brewing option.

“Comparing the projected construction costs of a new brewery against the price of buying and renovating the Pennsylvania brewery, leads us to believe that this is the better long-term strategic decision for the company,” said Martin Roper, president and CEO, in a prepared statement.

Boston Beer also owns the former Hudepohl-Schoenling brewery in Cincinnati, where it brews much of its beer. It also contracts to have beer brewed elsewhere, including at the Latrobe plant in Pennsylvania where Rolling Rock was once brewed.

The Lehigh Valley brewery was built for the F. & M. Schaefer Brewing Company in the 1970s, and was operated by the Stroh Brewery for many years. During part that period Stroh brewed Samuel Adams beer for Boston Beer.

When Stroh exited the brewing business, Pabst Brewing Company bought it. Pabst and operated it until September of 2001, when discontinued making its own beer. Diageo then bought it to make Smirnoff Ice.

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