G. Heileman Brewing was America's #4 brewer — a junk-bond takeover killed it

G. Heileman Brewing was founded in La Crosse, Wisconsin, in 1858 by Gottlieb Heileman. When he died in 1878 his widow Johanna took over and kept the brewery going through the difficult early years. After Prohibition the company grew steadily, and by 1970 it had become a regional force. Under president Russell Cleary, Heileman went on an acquisition spree — buying Blatz, Rainier, Lone Star, Colt 45 and nearly 400 other labels — and by 1983 it was the fourth-largest brewer in America, producing 17 million barrels a year with annual sales of $1.3 billion.

In 1987 Australian corporate raider Alan Bond launched a hostile takeover of Heileman using junk bonds. Bond already controlled half of Australia's brewing industry through his Tooheys group. Heileman's management resisted, but Cleary ultimately accepted what he called 'the best possible deal for employees, stockholders, and La Crosse.' The leverage was enormous and immediate.

Bond's own empire was built on borrowed money and collapsed within four years. In January 1991 G. Heileman Brewing, loaded with takeover debt, filed for bankruptcy. While in bankruptcy, Heileman tried launching 'Power Master' — a malt liquor with 7.4% alcohol — and faced a furious boycott campaign led by Chicago priest Michael Pfleger, who accused the company of targeting Black communities. The Bureau of Alcohol, Tobacco and Firearms forced Heileman to pull the product.

Heileman emerged from bankruptcy but never recovered. Private equity firm Hicks Muse bought it for $300 million in 1994 and sold it two years later to Stroh Brewery. Stroh itself collapsed in 1999; the brands passed to Pabst. A 130-year-old brewery that survived Prohibition and the Depression was destroyed in four years by a single financial transaction.