Stroh Quitting Beer Business After 149 Years

Stroh Brewery Co., the nation’s fourth-largest beer maker, announced that it is getting out of the beer business after 149 years and has struck deals to divide its brands between rivals Miller Brewing Co. and Pabst Brewing Co.

Detroit-based Stroh said Miller, a unit of tobacco giant Philip Morris Cos. and the nation’s No. 2 beer maker, will buy its Henry Weinhard’s and Mickeys brands.

Pabst, fifth-largest brewer in the country, will buy the remaining beer lines, including Old Milwaukee, Schlitz, Colt 45 and Heileman’s Old Style, as well as Stroh’s brewery in Lehigh Valley, Pa.

Terms of the transactions were not disclosed. The Milwaukee Journal Sentinel reported on Monday that the deal was valued at $400 million, but a Stroh spokeswoman denied that, declining to comment further.

“While the decision to end Stroh’s 149-year brewing tradition did not come easily, ultimately, Miller and Pabst presented an offer we believe is in the best interest of our owners,” said William Henry, Stroh president and chief executive.

Henry also cited the competitive nature of the U.S. beer industry.

Privately held Stroh, dwarfed by heavyweights Anheuser-Busch Cos., Miller and Adolph Coors Co., lost $3.9 million on net sales of $243.3 million in the third quarter, according to the Journal Sentinel.

Stroh’s parent company, Stroh Cos., plans to focus on its real estate business and on managing its portfolio of financial assets, the company said.

Following the closing of the deal, expected in April after a federal antitrust review, Stroh will continue to operate five remaining breweries under contract until production can be shifted to Pabst or Miller facilities, Stroh said. After production is shifted, Stroh will seek buyers for the five breweries, either as operating facilities or for alternative use.

The deal leaves up in the air the future of about 2,300 jobs, including workers at Stroh Brewery headquarters and five breweries in five states, Stroh spokeswoman Lacey Logan said.

In a related deal, Milwaukee-based Miller said it will buy the Olde English 800 and Hamm’s brands from San Antonio-based Pabst. The companies said they also struck an expanded contract-brewing arrangement.

Terms of the deals were not disclosed.