Anheuser-Busch is Buying Goose Island Brewery

(With additional reporting from The Associated Press)

St. Louis-based beer giant Anheuser-Busch (BUD) is buying Chicago-based Goose Island brewery for $38.8 million.

Anheuser-Busch says the deal, announced Monday, will help Goose Island meet growing demand for Honkers Ale and its other brands. Anheuser-Busch has distributed Goose Island beers since 2006.

Goose Island founder and president John Hall will stay as chief executive officer. He says the company couldn't brew some of its specialty beers fast enough to keep up with demand - and the deal with Anheuser-Busch will help with that.

"Chicago is going to continue to be our principle market," he said. "We will probably expand into some new markets, but we're not going to do any of those things until we supply the markets we're in right now."

Hall said Goose Island's roughly 120 employees will still operate in Chicago. Hall also said the beers will remain the same - and that he wouldn't have agreed to the deal if it involved changing the recipes.

Chicago's two Goose Island brew pubs are not part of the deal; they will continue operating. The deal needs regulators' approval and is expected to close in the second quarter this year.

Anheuser-Busch is buying 58% of Fulton Street Brewery, Goose Island's legal name, for $22.5 million and the remaining 42% from Portland, Ore.-based Craft Brewers Alliance for $16.3 million.

(Photo courtesy of Goose Island)