The Freedom to Brew Your Own Way: Coopers, Mr. Beer, & The Merger

A small, family company (albeit a public one) was able to withstand the most strenuous and ingenious tactics of a large corporate group and its highly paid advisers. It managed to retain the loyalty of its shareholders to the astonishment of many observers. - John P.G. Lessing & Renaee Johns

In late 2005, Coopers Brewery stands at the center of a hostile takeover bid by Lion Nathan, now known as Lion. Lion Nathan's portfolio at the time includes names like Beck's, Birra Moretti, Boddington's, Heineken, Kirin, and Steinlager for Australia and New Zealand. Meanwhile, Coopers Brewery holds its position as the 3^rd largest Australian-owned brewery, and the world's largest producer of homebrewing equipment. Lion Nathan possesses shares and 3^rdtier purchasing rights at the time, and so they make their bid. A heated battle erupts, which rattles Coopers' executives, employees and the board, and gives Australian media outlets fodder for months and months. As the name connotes, a "hostile" takeover is terribly aggressive and makes for a daunting work environment for the company being encroached upon. Coopers' then Financial Accountant, Melanie Cooper, recalls being "buoyed by the encouragement of shareholders, who in their loyalty were prepared to stand up for what they believed in and to circle the wagons against Lion Nathan." She remembers, "most of them [shareholders] would have become multi-millionaires but they weren't dissuaded. It wasn't about the money. Those shareholders were just as loyal as the employees." Press headlines taken from Cooper shareholder commentary run with sentiments like "they can't buy out my family," "why beer's worth more than money," and "it's not about the money." In the end, 93.4% of Coopers shareholders vote in favor of permanently removing the purchasing rights of Lion Nathan. Lion Nathan's $420 million bid fails. Coopers, a primarily family-owned and operated business, is not for sale. Coopers circulates an ad at the offset of the resolution, its message particularly effective. It's an image of a large, blue, fiberglass whale, which had previously been part of a display at the river's edge, floating down the River Torrens after a flood. The text beneath it reads "The freedom to go your own way. (We can relate to that.)"

Unswerving priorities

Lion Nathan had not considered the deliberately complex company constitution of Cooper's Brewery. A constitution built to complicate the sale of shares outside of the family, and to keep shares out of the hands of competitors. Lion is now owned by Japanese conglomerate, Kirin, and Foster's was acquired by SABMiller in 2011 –two moves which have allowed for Coopers to boast the title of Largest Australian-owned Brewer. Some may see Coopers well-protected constitution as an affront to the preferences of individual shareholders, but with 90% of them being linked via birth or marriage to Thomas Cooper himself, loyalty to and pride in the family business take priority.

When the merger makes sense

Considering Coopers' reputation for excellence and integrity, it should come as no surprise that when the brewery approached Tucson's Mr. Beer to acquire them in 2012, both sides saw great mutual benefit. Coopers Marketing Manager, Scott Harris, said at the time that, "the culture at both companies was similar, as was our ideology of home brewing and how it should be presented to the consumer." Coopers saw an opportunity to add value with their brewing knowledge, to shift Mr. Beer brewing extract to high-grade all-malt beer instead of lower-quality, sugar-based ingredients. Mr. Beer recognized the chance to improve product quality with a recognized industry champion that shared the same value system. Most importantly, Mr. Beer's Managing Director at the time of the merger, Mike Bernstein, recognized the massive benefit for customers – for homebrewers and their increasingly more discerning, craft-beer-hungry palates. Just as many Mr. Beer brewers had hoped, the merger made for better quality beer.

The ascent of the buy out

As more breweries and, as of this week, homebrew suppliers like Northern Brewer and Midwest Supplies are taken over by multinational conglomerates, Mr. Beer remains honored to be partnered with a brewery that fought to retain control over the ingredients, techniques, and tradition established by its founder over 150 years ago. The temptation to bend for more capital is surely great in the beer industry at this point, and it's no small feat that Coopers held its ground. Mr. Beer saw great success in being acquired by Coopers, but only because the "sum of the parts [was] greater than the whole" – as Coopers' Harris said of the 2012 merger. The business doing the buying was one whose philosophy aligned with Mr. Beer's own – and this is cannot be so easily promised by industry behemoths like SABMiller, AB INBev, etc., whose own interests and values are obscured by the sheer number of breweries functioning under their name.

Alison Painter, Tim Cooper, and Rob Linn. (2013) "Jolly Good Ale and Old – Coopers Brewery 1862-2012". John P.G. Lessing and Renaee Johns. "Resisting a hostile takeover: the Lion Nathan bid for Coopers Brewery". Jul. 2006. Phil Villareal, Arizona Daily Star. "Australia's Coopers Brewery takes over brewing-kit maker Mr. Beer". May 2012.