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Craft beer maker Southern Tier merging with Pennsylvania brewery

Southern Tier Brewing Company

Production at Southern Tier Brewing Company is expected to increase after announcing this week it will join with Pennsylvania-based Victory Brewing in a merger that will create one of the largest breweries in the nation.Victory was recently purchased by Artisanal Brewing Ventures, a company owned by Southern Tier and Ulysses Management, an equity firm operating out of Manhattan, N.Y. Co-Founder and Brewmaster Bill Covaleski says he expects the merger to lead to the creation of more jobs.

“We’re going to see nothing but growth, as long as we do the things that we say we’re going to do together,” said Covaleski. “This is an expanding marketplace that actually requires deeper investments, not less investments. So the employment piece of this is very stable.”

Victory currently has 411 employees, while Southern Tier employs 85. Covaleski says he believes the merger will position both breweries well for the future.

“Victory is the 28th largest brewery in the United States, and Southern Tier clocked in last year at number 31,” said Covaleski. “Combined, we end up in the 15th position which actually gives us a lot of better leverage to talk to the wholesalers, who manage the beer moving from producing breweries to consumers.”

While some breweries change their recipes after forming a partnership, Covaleski tells WBFO the formulas will remain untouched.

“Both breweries were founded on innovation and quality, and that is the secret sauce that got us to success, so trying to dilute that secret sauce is not in the plans,” said Covaleski. “We believe that we can continue on the strengths of our existing portfolios and actually innovate and collaborate together to come up with new solutions.”

The deal is expected to close within the next few months. Both breweries will continue to operate independently, and their current leadership teams will remain in place.