ST. LOUIS — A lawsuit filed Wednesday alleges that Anheuser-Busch used its power as distributor and shareholder with the Craft Brew Alliance to drive down the Portland, Oregon-based brewer's sales and stock price ahead of the companies' 2019 merger.
The lawsuit was filed in Multnomah County court by shareholder Tim Malloy, who is seeking class action status on behalf of other owners of CBA stock. The suit names Anheuser-Busch and CBA executives and board members as plaintiffs.
Malloy is represented by Motschenbacher and Blattner of Portland.
St. Louis-based Anheuser-Busch announced its acquisition of CBA in November at $16.50 a share. The world's largest brewer already had a 31.2 percent ownership stake in CBA, and largely controlled distribution of CBA brands, which include Red Hook, Widmer Brothers and Kona. It was able to use its power within the smaller company to purchase CBA at a lower price than had been negotiated earlier, according to Malloy's complaint.
Earlier in the two companies' relationship, they agreed to a buyout option in which A-B would purchase CBA for $22 per share by Aug. 24, 2017, according to the complaint. Once that deadline passed, the price would rise to $23.25 for a buyout deadline of Aug. 24, 2018, and $24.50 by Aug. 23, 2019 — a deal that, at the time, would have equaled about $328 million.
Rather than buy out the remaining stake in CBA, Anheuser-Busch had the option to walk away from the deal with a one-time fee of $20 million, which it agreed to do in August.
But at the same time, Malloy's lawsuit claims A-B used its power over CBA's access to A-B's distribution network — which accounted for more than 90% of CBA's sales — to suppress the company's revenue, resulting in lower stock prices, according to the complaint.
"Anheuser-Busch embarked on a deliberate course of conduct to stymie CBA’s growth, which would ultimately allow Anheuser-Busch to purchase CBA at a discount of approximately $107 million," the complaint said.
"Once the Company’s stock price was artificially lowered through Anheuser-Busch’s intentional acts, Anheuser-Busch moved in for the kill, using its significant stockholdings and leverage over the company’s distribution and sales processes to disrupt CBA’s operations and prevent it from entertaining other acquisition offers, forcing the Company into a sale on the cheap — indeed, $8.00 below the $24.50 Buyout Option price per share."
Malloy is seeking $107 million on behalf of CBA shareholders.
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