Stroh Acquires G. Heileman $300 Million Deal Should Help Stroh Survive Stiff Competition

The Stroh Brewery Co. solidified its position as the nation’s No. 4 beer-maker with Thursday’s announced deal to acquire struggling G. Heileman Brewing Co., which makes Old Style, Rainier and Henry Weinhard, among other beers.

Analysts say the deal, which they estimated to be worth about $300 million, should help Stroh survive in the competitive and slow-growing beer market, dominated by giants Anheuser-Busch and Miller.

“It’s a very, very nice fit,” beer industry consultant Robert Weinberg said from St. Louis. Stroh is “the only brewer that could have absorbed Heileman whole.”

That is particularly good news for Heileman’s 2,200 employees, who also make Lone Star, Special Export, Schmidt’s, Champale and Mickey’s brands.

Heileman’s main facility is in LaCrosse, Wis., while its headquarters is in Rosemont, Ill.

Heileman was forced into bankruptcy after a 1989 hostile takeover. It emerged in 1991 and was sold two years later for $428 million to a private Dallas investment company.

But higher aluminum prices and lower-than-expected revenue from contract brewing have hurt Heileman in recent months, and it failed to make a Jan. 31 interest payment on bonds.

“In light of our current financial position, this transaction is not only a positive move for Stroh, but also for many employees of Heileman,” said Heileman President and Chief Executive M. L. Lowenkron.

Stroh will take over Heileman’s five breweries, located in LaCrosse, Wis.; Baltimore; Portland; Seattle; and San Antonio, Texas, as well as a beverage plant in Perry, Ga.