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US: Anheuser-Busch ups holding in Redhook

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Anheuser-Busch is to increase its holding in US brewer Redhook Ale. Redhook announced yesterday that it has agreed upon the principal financial terms of an ongoing business relationship with the brewing giant.

The new agreement in principal provides for Anheuser-Busch's stake in Redhook to increase to 34%, a US$2m cash payment to Anheuser-Busch prior to 1 December, and an increase in certain fees Redhook must pay to Anheuser-Busch in connection with its distribution of Redhook products. All obligations of Redhook to redeem the Series B Preferred Stock held by Anheuser-Busch now or at any time in the future will be cancelled.

While legal documentation and other significant considerations have not yet been finalised, the two companies have reached agreement on the major financial terms. The new agreement is expected to be completed before 30 June.

"We are very proud to announce the extension of our business relationship with Anheuser-Busch. While not formally executed, we have reached the point where both organisations have agreed to the principal financial terms of an ongoing business relationship," Paul Shipman, president and CEO of Redhook said in a statement.

"Anheuser-Busch is pleased with its relationship with Redhook," added August A. Busch IV, president of Anheuser-Busch, Inc. "Our restructured agreement continues to provide our wholesalers with a high-quality portfolio of craft specialty beers that serves the key high-end segment."

As of 12 March 12 2004, Anheuser-Busch held 29.8% of Redhook's outstanding shares of common stock, calculated on a fully diluted basis. The current distribution agreement is subject to one-time early termination by either Redhook or Anheuser-Busch without cause on 31 December 2004.

The obligations of the parties to consummate the above transactions and arrangements are dependent upon their agreement on the covenants, representations, warranties and definitive documentation relating to the above transactions and arrangements.


Sectors: Beer & cider

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