The deal includes the purchase of Bath Ales’ brewery, all of its beer brands and its 11 pubs.
Chief executive of St Austell James Staughton had been looking at Bath Ales for a long time and the acquisition would see two like-minded businesses come together, he said.
“Bath Ales brews great beer and has a thriving pub estate, both of which complement those of St Austell Brewery,” he added.
The purchase signals St Austell’s long-term significant investment in Bath Ales brands, pub estate, staff and brewing facilities, said Staughton.
“We already operate a successful free trade business across the region, and a wholesale service to free trade customers, which will bring additional routes to market for Bath Ales’ beers.”
Bath Ales founder Roger Jones said the move would result in broader investment in the brand and would also help it capture more business opportunities.
He said: “We are confident that we can also make a strong contribution to their operations so that the combined organisation can really set the standard for quality beers and outstanding venues."
‘Consistent set of values’
“From the first contact with St Austell Brewery, we genuinely found people and an operation that had a consistent set of values and the same commitment to quality. The combined business will be a force to be reckoned with.”
Meanwhile, St Austell Brewery announced annual turnover up 7.9% to £137.4m and a 7.6% increase in operating profit to £13.5m for the 53 weeks to 2 January.
Bath Ales also reported strong growth for the same period, with total sales up 7% to £15.3m and beer brand sales up 18% to more than 20,000 barrels.
In 2014 St Austell opened its first craft beer and smokehouse concept at a cost of £1.5m.