USA: New Belgium Brewing’s employee owners vote in favour of selling company to Kirin-owned Lion Little World Beverages
New Belgium Brewing Company’s employee owners have voted in favor of selling the company to Kirin-owned Lion Little World Beverages despite human rights groups’ concerns over the Japanese beer giant’s business dealings in Myanmar, Brewbound.com reported on December 17.
New Belgium and Lion announced the proposed sale on November 19, with the Australasian beer company poised to acquire 100% of the Fort Collins, Colorado-headquartered brewery — the fourth largest Brewers Association-defined domestic craft brewery — in an all cash transaction. The deal’s value has been pegged at between $350 million and $400 million, according to Forbes.
The completion of the transaction was contingent on a vote of New Belgium’s employee owners after the institution of 100% employee-ownership in 2012. The deal has also cleared antitrust regulatory approval. The transaction is now expected to be finalized by the end of 2019, pending customary closing conditions.
“Today, New Belgium ESOP participants voted in favor of the proposed transaction with Little World Beverages,” New Belgium CEO Steve Fechheimer said in a statement shared by the craft brewery. “This result moves us one step closer towards New Belgium Brewing officially joining Lion Little World Beverages. We’re excited about the next chapter for NBB and continuing to prove business can be a force for good.”
“We are grateful to have the trust of New Belgium employees as we move forward to deal close,” Lion Little World Beverages managing director Matt Tapper added in a separate statement. “New Belgium has great people, great brands and a great company. I can’t wait to get started.”
The completion of the sale will mean more than 300 New Belgium employees will receive more than $100,000 in retirement money, with some employees receiving more. Once the transaction closes, New Belgium’s ESOP will have paid nearly $190 million to its current and former employees.
The vote comes a week after human rights groups urged the craft brewery’s employee owners to vote against the sale due to Japanese beer giant Kirin’s ties to Myanmar Economic Holdings Ltd. (MEHL), whose chairman, Gen. Min Aung Hlaing, is accused of carrying out a military operation with “genocidal intent” against the Rohingya Muslims in the country.
Kirin has operated two joint ventures in Myanmar with MEHL, Myanmar Brewery Limited (MBL) and Mandalay Brewery Limited (MDL), since 2015.
A United Nations report released in August found that the Myanmar military’s network of businesses allowed it to carry out ethnic cleansing, murder and rape of Rohingya Muslims in the country. In 2017, a military operation conducted by the Myanmar military forced more than 730,000 Rohingya Muslims to flee to Bangladesh. A three-member panel recommended that Min Aung Hlaing face trail on charges of genocide before an international court.
Last week, the United States issued sanctions against four Myanmar military leaders, including Min Aung Hlaing, for the alleged crimes against the Rohingya people and other minorities, the South China Morning Post reported. Meanwhile, Myanmar’s leader, Aung San Suu Kyi, was in hearings at The Hague, defending charges of genocide brought against the country by Gambia.
In an email to New Belgium’s workforce on Friday, co-founder Kim Jordan wrote that Kirin has invited her to work in concert with its International Advisory Board to examine the Japanese beer giant’s operations and relationships in Myanmar. The review is expected to begin in January.
The International Advisory Board — made up of four members from countries outside of Japan as well as three executive officers from Kirin Holdings — acts as a consultative body to Kirin Holdings president and CEO Yoshinori Isozaki. According to Kirin’s website, the board “offers advice and proposals regarding the Group’s global growth strategies, which include mergers and acquisitions, as well as risk management and corporate governance.”
In a statement last week, New Belgium said “nothing about our potential agreement with Kirin will ever change who New Belgium is or what we support.”
“We appreciate that our friends and fans are raising concerns around Kirin’s business in Myanmar, this news is certainly unsettling,” the company said. “We believe Kirin shares our commitment to human rights and we will continue to champion humanity and equity within all our relationships. Our view remains that the partnership with Lion Little World Beverages is the right one to take NBB into the future and we have a firm commitment from Kirin that our own commitment to doing the right thing by our co-workers, promoting innovation and excellence in beer, and being a business role model will continue to thrive under this new ownership.”
Kirin also issued a statement calling respect for human rights “fundamental” to its business operations.
“Kirin is aware of and is deeply concerned by these investigations [in Myanmar],” the company said in a statement. “We take these matters very seriously and our detailed response to the Amnesty International Report and our own human rights impact statement can be found on our website.”
When the transaction was announced last month, Jordan cited “competing priorities” and financial pressures as reasons for the sale, including increased competition from 7,500 craft breweries, the cash demands of the ESOP and supporting a growing brand.
“As we surveyed the landscape over the last several years, we found that options to raise capital while being an independent brewer weren’t realistic for us,” she wrote. “Some of the most widely used options by craft brewers were going to compromise a lot about what makes New Belgium great; environmental sustainability, and a rich internal culture. Some of these were going to lead to cost-cutting or a lack of focus on sustainability. Having the support and resources of Lion Little World Beverages allows us to attend to those competing priorities and utilize our brewery capacity to its fullest.”
Among the benefits of linking up with Lion were its “purpose-driven culture” and the desire to continue New Belgium’s mission as a “force for good.” New Belgium’s leaders also cited the shared goal of reaching carbon neutrality, and the craft brewery’s status as a certified B Corp, a designation awarded to businesses that balance profit and purpose through “social and environmental performance, public transparency, and legal accountability.”
17 December, 2019
