The Boston Beer Company Announces Agreement With Diageo to Acquire Pennsylvania Brewery

The Boston Beer Company Announces Agreement With Diageo to Acquire Pennsylvania Brewery

Pennsylvania Brewery Located Outside of Philadelphia Will Complement Company’s Breweries in Boston and Cincinnati, Providing Increased Capacity and Production Flexibility

The Boston Beer Company, Inc. , announced today that it has signed a purchase and sale agreement with Diageo North America, Inc. to acquire a brewery located 60 miles outside of Philadelphia, for $55 million. The purchase is expected to take place in late spring 2008, subject to the satisfactory completion of due diligence by Boston Beer. If the results of the due diligence process are satisfactory, the company will discontinue exploring the option of building a new brewery in Freetown, Massachusetts.

It is estimated that the Pennsylvania brewery will initially increase Boston Beer’s brewing capacity by approximately 1.6 million barrels of beer annually with the potential for expansion to over 2 million barrels with modest incremental investment. This brewery provides the company with additional flexibility and ensures adequate capacity for continued growth. Boston Beer is familiar with the site’s brewhouse, having brewed some of its beer there from 1994-2001. In fact, Boston Beer won several major awards for Samuel Adams brewed at this brewery. The Pennsylvania brewery will complement the breweries that the company owns and operates in Boston, Massachusetts and Cincinnati, Ohio.

Boston Beer anticipates that the brewery will require substantial investment and renovation in order to brew Samuel Adams craft beers there once again, the extent of which will not be fully understood until the due diligence is completed. Until such evaluation is complete, it is impossible to estimate precisely the total cost of any required renovation and upgrade or the operating and financial statement impact to the company. The brewery is expected to begin brewing Samuel Adams beers in the third or fourth quarter of 2008.

“This agreement is a great opportunity to revitalize a classic brewery and restore its capability to brew our craft beers, which are increasingly in demand among beer drinkers nationwide,” said Martin Roper, President & CEO of The Boston Beer Company.