Boston Beer: News of Potential Takeover From Suntory Sends Shares Higher; We See Merit in the Deal

Shares of Boston Beer rallied 22% on May 31, on a Wall Street Journal report that the Japanese spirits maker Suntory is in early talks with the brewer for an acquisition. We see the deal as attractive from Suntory’s perspective. It would give the Japanese firm access to Boston Beer’s strong brands in the structurally attractive beyond beer category, and also help diversify Suntory’s spirits-dominated portfolio to broaden its appeal to wholesalers and the on-premises channel in the US. In addition, the two companies have had licensing and distribution agreements since 2021, with some understanding of each other’s corporate culture and processes that we think could help move the negotiations along.