Coors to Buy Most of Stroh for $425 Million

Coors Brewing Co. said today it has agreed to pay $425 million to acquire most of Stroh Brewing Co., the nation’s third-largest brewer.

The deal will give Coors, which has been the fourth-largest brewing company, ownership of such venerable brands as Stroh’s, Schlitz and Schaefer, and continues a drive begun in the early 1980s to expand Coors from a regional to a national brewer.

Peter Coors, chairman, chief executive officer and president of Coors Brewing Co., said the acquisition will provide Coors “with a real opportunity to achieve our vision of becoming a major, long-term factor in the U.S. brewing industry.”

Coors Brewing Co. is a unit of the Adolph Coors Co.

The Detroit-based Stroh has been looking for potential partners since February and announced Aug. 31 it was laying off 300 of its 1,500 white-collar employees nationwide. The 139-year-old company had been suffering financial troubles since it went national by acquiring Jos. Schlitz Brewing Co. in 1982.

Stroh was unable to make inroads on the growth of Anheuser Busch, which dominates the industry with a 41% share of the national beer market, far ahead of Miller’s 21% and Stroh’s 11%.

Besides Stroh’s, Schlitz and Schaefer, the agreement will allow Coors to acquire Signature, Old Milwaukee, Red Bull, Silver Thunder and St. Barts, as well as the licensing rights to Piels and Augsburger.

The acquisition also includes plants in St. Paul, Minn.; Tampa, Fla.; Winston-Salem, N.C.; Longview, Tex.; and Allentown, Pa.

Stroh said it will keep breweries in Van Nuys, Calif., and Memphis, Tenn. In its announcement, Coors said it will pay $425 million for the Stroh assets, and part of that price will include the assumption of certain long-term debt and other selected liabilities. It was not immediately known how much debt is involved.

The transaction is subject to approval by the boards of directors of both companies.