• 4.00 dollars per share represents a 19.4% premium to the closing price of Waterloo Brewing Shares on the TSX as of Dec. 14, 2022

• All-cash offer provides immediate liquidity and certainty of value to Waterloo Brewing Shareholders

• Waterloo Brewing's Board has unanimously approved the Transaction and recommends that Waterloo Brewing Shareholders vote in favor of the Transaction

• Waterloo Brewing directors and officers representing 39% of the Waterloo Shares have entered into irrevocable support and voting agreements

Waterloo Brewing (TSX: WBR) – (Waterloo Brewing or the Company) announced that it has entered into a definitive arrangement agreement with Carlsberg Group. According to this, Carlsberg has agreed to acquire all of the issued and outstanding shares of Waterloo Brewing by way of a statutory plan of arrangement under the Business Corporations Act (Ontario). Under the terms of the Arrangement Agreement, holders of Waterloo Brewing Shares will receive C4.00 dollars in cash for each Waterloo Brewing Share held, which implies an aggregate equity value for Waterloo Brewing, of approximately C144 dollar million, on a fully diluted, in-the-money, treasury method basis and an enterprise value of C217 dollar million. The total offer Consideration also represents an implied TEV/LTM EBITDA multiple of 12.4, based on Waterloo's third-quarter results ending October 30, 2022.

"We've enjoyed a close relationship with Carlsberg and are excited about becoming part of one of the largest brewing companies in the world," said George Croft, president, and chief executive officer, Waterloo Brewing. "Waterloo Brewing will be a great fit with Carlsberg's strong, purpose-driven culture, and board of directors is confident that joining Carlsberg is the best long-term solution for our employees, partners, customers, consumers, and community."

Carlsberg Group, chief executive officer, Cees't Hart, commented, "One of our priorities in our SAIL'27 strategy is to grow our business in attractive markets, where we are small today, like Canada. The acquisition of Waterloo Brewing significantly improves our growth prospects in the Canadian market."

Anders Rud Jørgensen, managing director, Carlsberg Canada, says, "This exciting opportunity will scale our business in Canada. The brand portfolios are complementary. Local sourcing will secure long-term robustness of supply, increase commercial flexibility, and speed to market for innovations, step-changing the way we operate. Waterloo Brewing's excellent portfolio of long-standing co-packing relationships will benefit from these combined operations."

Transaction Highlights:

The Consideration represents a 19.4% premium to the closing price of the Waterloo Brewing Shares on the Toronto Stock Exchange (TSX) as of December 14, 2022, and a 26.0% premium over the ten-day volume-weighted average price.

The Consideration represents a premium valuation equating to an implied TEV/LTM EBITDA multiple of 12.4x based on Waterloo Brewing's third-quarter results ending October 30, 2022.

The all-cash offer crystalizes value for Waterloo Brewing Shareholders and provides liquidity and certainty of value.

Waterloo Brewing board of directors, having received a unanimous recommendation from a special committee of independent directors consisting of John Bowey, Peter Schwartz, Stanley Dunford, David Shaw, and Ed Kernaghan, has unanimously approved the Transaction and recommends that Waterloo Brewing Shareholders vote in favor of the Transaction.

Directors and executive officers of Waterloo Brewing, representing ~39% of Waterloo Brewing Shares, and ~45% of Company options, have entered into irrevocable support and voting agreements with Carlsberg according to which they have agreed to vote their Waterloo Brewing Shares and options in favor of the Transaction.

The Transaction is not subject to a financing condition, and consideration will be funded from Carlsberg's existing cash on its balance sheet.

Transaction Details

Under the terms of the Transaction, holders of Waterloo Brewing Shares will receive C$4.00 in cash for each Waterloo Brewing Share held. Each in-the-money option of the Company outstanding, will be deemed to be vested and disposed of to the Company for an in-the-money cash payment and Company options issued and outstanding shall thereafter be immediately canceled.

The Transaction will be effected by way of a statutory plan of arrangement under the Business Corporations Act (Ontario) and is subject to customary closing conditions, including approval of the Ontario Superior Court of Justice and the approval of

(a) at least two-thirds of the votes cast by holders of Waterloo Brewing Shares and options, voting together as a single class,

(b) two-thirds of the votes cast by holders of Waterloo Brewing Shares, voting as a separate class and

(c) a simple majority of the votes cast by the holders of Waterloo Brewing Shares (excluding the votes cast by two executive officers holding approximately 5.7% of the Waterloo Brewing Shares) as required under Multilateral Instrument 61-101 – Protection of Minority Securityholders in Special Transactions.

Waterloo and Carlsberg have each provided representations and warranties customary for a transaction of this nature in this Arrangement Agreement. In addition, the Arrangement Agreement includes customary deal protection provisions, including that Waterloo Brewing has agreed not to solicit or initiate any discussion regarding any other business combination, subject to customary 'fiduciary out' rights. Waterloo Brewing has also granted Carlsberg a right to match any superior proposal and will pay a termination fee of C$6.0 million to Carlsberg if the Arrangement Agreement is terminated, in certain circumstances, including if the Waterloo Brewing Board recommends or approves an acquisition proposal or enters into an agreement concerning a superior proposal.

The Board, acting on the unanimous recommendation of the Special Committee, has approved the Transaction and unanimously recommends that Waterloo Brewing Shareholders vote in favor of the Transaction.

Canaccord Genuity and Paradigm Capital have each provided a fairness opinion to the board of directors and the special committee, to the effect that, subject to the assumptions, limitations, and qualifications set out in such opinions, as such other matters considered relevant, Consideration to be received according to the Transaction is fair. From a financial point of view to Waterloo Brewing Shareholders. Copies of the fairness opinions of Canaccord Genuity and Paradigm Capital and a description of the various factors considered by the Special Committee and the Board in their determination to approve the Transaction, as well as other relevant background information, will be included in the information circular to be sent to Waterloo Brewing Shareholders in the coming weeks in advance of the special meeting of Company shareholders and option holders to vote on the Plan of Arrangement. The Special Meeting is expected to occur in late February 2023, and it is currently anticipated that subject to the satisfaction of closing conditions. The Transaction will be completed in the first quarter of 2023. Copies of the information circular, the Arrangement Agreement, the Plan of Arrangement, and the voting and support agreements will be filed with the applicable securities regulators.

Following closing, Waterloo Brewing Shares will be de-listed from the TSX, and it is anticipated that Waterloo will apply to cease to be a reporting issuer.