Stone Brewing, San Diego County's largest brewing company, has been acquired by Japanese beer giant Sapporo's United States branch, it was announced Friday.
The deal is valued at around $165 million with potential for additional payments based on business performance and is expected to close in August.
"This is the right next chapter for Stone Brewing," said Greg Koch, co-founder and executive chairman of Stone Brewing. "For 26 years, our amazing team has worked tirelessly to brew beers that have set trends and redefined expectations.
"To have the interest of a company like Sapporo in continuing the Stone story is a testament to the great beers we've created and will continue to create for our fans across the globe," he said.
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Sapporo intends to produce its Sapporo-branded beers for distribution in Stone's breweries in Escondido and Richmond, Virginia. A statement from Sapporo read that the company intends to brew 360,000 barrels in the U.S. by the end of 2024, essentially doubling Stone's current production. The acquisition will bring "together the complementary strengths of Japanese artistry and innovation with the American craft brewing tradition in a fusion of cultures," a statement from the Japanese company read.
"We approached Stone Brewing seeking a partner for our growth plans in the U.S, and we quickly recognized they were an ideal partner with bi-coastal brewing capacity, loyal fans, superb management, shared cultural values, and commitment to the highest quality standards," said Kenny Sadai, chairman of Sapporo U.S.A. "This acquisition puts the resources and legacy of the largest Asian beer brand in America together with one of the most innovative and recognized craft beer brands in the world.
"It's a perfect fusion of east meets west that is an ideal marriage for Sapporo's long-term growth strategy in the U.S.," he said.
Stone will continue to brew its beers at the two breweries, as well as operate its seven tap rooms with existing branding, management, and workforce under the Sapporo umbrella.
"I am thrilled that we have the opportunity to join forces with Sapporo," said Maria Stipp, CEO of Stone Brewing. "This unique partnership allows us to preserve the Stone legacy that our fans know and love and will add exponential opportunities for growth, from production to more investment in people, equipment, sales, and marketing."
Stone is the second acquisition in the craft brew market for Sapporo, following the purchase of San Francisco's Anchor Brewing in 2017.
Stone Distributing, Stone's distribution business, is not part of the sale and will become an independent company under current ownership. Stone Distributing will continue to service Southern California with a portfolio of 42 craft brands.
Before this purchase, Stone was the ninth-largest producer of craft beer in the United States, according to the Brewers Association. The county's new largest producer of "craft" beer will become the Convicts and Kings/Ballast Point merger, followed by Modern Times -- which was just purchased by Orange County's Brewery X. The recent moves in the beer industry mean San Diego, once considered a craft beer capital, will have no locally owned representatives in the Brewers Association's top 50.