Pabst Brewing Co. said yesterday it agreed to be acquired by G. Heileman Brewing Co. for $11 a share, or $69.3 million.
However, in order to satisfy antitrust concerns of the Justice Department, Heileman agreed to sell one of Pabst's breweries and some of Pabst's brands of beer to investor Paul Kalmanovitz of California.
Both Kalmanovitz and Heileman had offered $10 a share to acquire Pabst. But after Heileman sweetened its offer and agreed to sell the Pabst assets to Kalmanovitz, Kalmanovitz dropped his bid.
Under the agreement, Heileman would sell Pabst's brewery in Tumwater, Wash., and its Olympia and Hamm's beer brands and Old English 800 malt liquor to S&P Co., a company controlled by Kalmanovitz. S&P currently operates such regional brewers as Falstaff Brewing Corp., Pearl Brewing Co. and General Brewing Co.
Heileman, based in La Crosse, Wis., would retain Pabst Blue Ribbon and other Pabst labels. Heileman's current beer brands include Old Style, Blitz-Weinhard and Colt 45.
Before the announcement, the president of Christian Schmidt Brewing Co. of Philadelphia said his company was considering an antitrust suit against Heileman if Heileman proceeded with the Pabst acquisition.
"We think we'd be injured in a Heileman and Pabst merger in the marketplace," William T. Elliott, Schmidt's president and chief operating officer, said in an interview with the Milwaukee Journal.
Heileman spokeswoman Louise Druring declined comment on Elliott's statement.
In 1983, Pabst was the nation's sixth-largest brewer with about 7 percent of the U.S. market and shipments of 12.8 million barrels, according to the Value Line Investment Survey, an investment research guide.
Heileman was ranked fourth with about 9.5 percent of the market and shipments totaling 17.5 million barrels.