By Mike Murphy
San Francisco’s Anchor Brewing, which bills itself as the oldest craft brewer in the U.S., will be sold to Japan’s Sapporo Holdings Ltd. in a deal worth about $85 million.
The 121-year-old brewery is widely credited with sparking the craft beer movement in the U.S., and is the latest independent brewer to be snapped up by a much larger beer company in recent years. In May, Heineken N.V. /zigman2/quotes/205347870/delayed NL:HEIA +0.03% purchased full control of Petaluma, Calif.,-based Lagunitas Brewing Co., and Anheuser Busch InBev /zigman2/quotes/209225053/composite BUD +2.37% bought North Carolina’s Wicked Weed Brewing Co.
The purchase price is a fraction of recent deals for California craft breweries. Heineken spent $500 million for 50% of Lagunitas in 2015, and about the same for the remaining half . San Diego’s Ballast Point Brewing & Spirits also sold for about $1 billion to Constellation Brands Inc. /zigman2/quotes/207737284/composite STZ -0.92% in 2015.
The purchase price is about two-and-a-half times its 2016 annual sales of $33 million. Anchor produced 135,000 barrels in 2016, down 4% from the previous year. In 2015, Lagunitas produced about 791,000 barrels, and Ballast Point about 278,000 barrels, respectively.
Founded in 1896, Anchor was on the verge of bankruptcy when Fritz Maytag bought the company in 1965. Maytag changed the brewer’s focus, making high-quality beers at higher prices. The new business model worked, and by the mid-1970s, Anchor was turning a profit and set the stage for craft brewers across the nation to follow his example. Maytag sold to a local investment group in 2010.
Sapporo is even older than Anchor, founded in 1876, and Anchor is its first U.S. acquisition. The company said it intends to keep operations in San Francisco. In 2006, Sapporo /zigman2/quotes/200413497/delayed JP:2501 +0.05% bought Canada’s Sleeman Breweries Ltd. for $400 million.
Anchor had reportedly sought a buyer for the past year before settling on Sapporo, which is the best-selling Asian beer in the U.S.
“When you take a brand like Anchor, its very soul exists in the heart of San Francisco,” Anchor President and CEO Keith Greggor told the San Francisco Chronicle . “Of all the people we spoke to, (Sapporo) respected Anchor the most, what it stood for and the importance of its connection with San Francisco.”