Carlsberg Group to buy Waterloo Brewing for $144 million

Waterloo Brewing has signed a deal to be purchased by Carlsberg Group. The deal is expected to close in the first half of 2023.

Deal is expected to close early in the first half of 2023

Waterloo Brewing, based in Kitchener, Ont., has signed a deal that would see Carlsberg Group buy the company for $144 million. (WaterlooBrewing/Twitter)

Waterloo Brewing Ltd. has signed a deal to be bought by the Carlsberg Group for $144 million.

Under the agreement, Denmark-based Carlsberg has agreed to pay $4 in cash for each Waterloo Brewing share.

Waterloo Brewing, based in Kitchener, Ont., shares closed at $3.35 on the Toronto Stock Exchange before the deal was announced late Wednesday.

Waterloo Brewing chief executive George Croft says the board of directors is confident that joining Carlsberg is the best long-term solution for the company's employees, partners, customers, consumers and community.

The transaction is expected to close early in the first half of 2023.

The deal requires approval by a two-thirds majority vote by shareholders as well as a simple majority vote by shareholders excluding the votes cast by two executive officers holding a 5.7 per cent stake in the company.

Sale not a surprise: Beer writer

The sale is not a surprise to Stephen Beaumont, a veteran beer writer and co-author of the World Atlas of Beer.

"Waterloo has a good facility out there in Kitchener-Waterloo and they are probably under-performing in terms of their brewing capacity of the equipment they have," he told CBC News.

"I think that they were kind of in a good position for this type of a takeover. Plus they're one of the few craft breweries that is a public company."

In February, Beau's Brewing Co. based near Ottawa was sold to Toronto-based Steam Whistle Brewing. Beau's cited the pandemic as a reason, saying it "dramatically" impacted the business, erasing about half of the brewery's revenue "overnight."

In February, shareholders of Beau’s Brewing Co. voted to accept an offer for share purchase from fellow independent craft brewery Steam Whistle. (Denis Babin/CBC)

In July, it was announced Amsterdam Brewery in Toronto had agreed to be purchased by Danish company Royal Unibrew. Royal Unibrew said the sale would help them serve the growing Canadian and U.S. markets.

More Carlsberg on offer

Beaumont said he expects this latest move will mean Canadian beer drinkers will see a lot more Carlsberg on offer in their local pubs and restaurants.

"In Carlsberg's case, I think they want a facility for brewing Carlsberg domestically. So I think we're going to see Ontario-produced Carlsberg start to sweep across Canada," he said.

"Canada is a very profitable market for the larger breweries," Beaumont added.

"We're notoriously well-known in the global brewing industry. It's one of the most profitable markets in in the world. So there's ample incentive to get more heavily involved in the Canadian market. It's not a huge marketplace. We're not even among the top 10 per capita beer consumers in the world anymore, but we seem to be willing to pay a lot for our beer."

LISTEN | Waterloo Brewing agrees to $144M sale to Carlsberg Group:

Waterloo Brewing has signed an agreement to be purchased by Carlsberg. So what does that mean for their ties to the community? George Croft, president and CEO of Waterloo Brewing, and Anders Jorgensen, managing director of Carlsberg Canada, talk about the deal and what it means for the future of the Kitchener, Ont., brewery.

With files from Krystalle Ramlakhan, Kate Bueckert