The season of brewery mergers is surging ahead. Royal Oak’s Roak Brewing has struck a deal to acquire popular Marshall-based beer maker Dark Horse Brewing Company. Dark Horse has submitted plans to the Michigan Liquor Control Commission for a transfer of ownership to Roak, WWMT reports. The transfer is currently listed as pending on the MLCC website as it awaits state approval.
Reached by Eater, Roak’s CEO John Leone says that the impending merger with Dark Horse is part of an effort to strengthen both brands in a challenging beer market. “It’s competitive out there. There’s a lot of craft breweries out there,” he says. “By putting the companies together we’re able to make more profits and reinvest back into our business.”
He points to a trend among major international beer companies such as AB-InBev acquiring smaller brewers. “Lately we’re seeing the larger publicly traded coming in and buying us up and one way to do that is to partner together,” he says. “It allows us to compete and maintain our independence.”
Dark Horse Brewing Company was founded by the Morse family in 1997 and grew into one of Michigan’s largest breweries. The company currently distributes throughout the Midwest and across the East Coast, though records show that the brewer’s volume of in-state sales declined by 59 percent from 2017 to 2018. The company known for such labels as the Crooked Tree IPA and Raspberry Ale, was the subject of the History Channel series Dark Horse Nation. Dark Horse’s president and co-owner Aaron Morse tells WWMT that the merger won’t result in layoffs and that the brewery will remain a distinct brand. Morse will also remain a partner in the newly formed company.
Roak Brewing Company opened its taproom and production facility in Royal Oak in 2015 and is also among the largest breweries by volume in the state. Last winter, the company announced a similar deal to merge with Traverse City-based Right Brain Brewery in an effort to strengthen both beer makers’ places in the market; however, Leone confirms to Eater that the deal has since fallen through. The Dark Horse partnership, in contrast, is all but certain. It’s expected to be completed by the end of December.
With both brands under the same management group, the breweries plan to combine and expand their sales team. Leone says fans of both breweries can expect to see the labels and programs such as mug clubs stay the same. Both brewers’ taprooms with likely carry each other’s beer in some capacity and may collaborate on special releases. “We’ll do as much cross-pollination as we can,” he says. Farther down the line, the Roak taproom might expand. Roak is also leaving the door open to more possible mergers with Michigan breweries.
This is the latest in a string of beer mergers and acquisitions to hit the Michigan brewing industry. A California-based cannabis beverage maker Two Roots Brewing Company confirmed this week that it had acquired Rochester Mills Production Brewery, a branch of Rochester Mills Beer Company. In August, Spanish brewer Mahou San Miguel moved to take a majority stake in Founders Brewing Company.
Leone says he’s excited to work with Morse, someone with a long history in the Michigan craft beer industry. “He was one of the early forerunners of the industry and he deserves a lot of credit. He’s a great guy and I’m excited to work with him and see what we can do together,” Leone says. “We think overall there will be improvements between the two breweries.”
Update, September 12, 2019, 1:25 p.m.: This story has been updated with comments from Roak CEO John Leone.
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