The deal includes the Bath Ales brewery (situated between Bath and Bristol), its portfolio of beer brands and its 11-strong pub estates.
James Staughton, chief executive, St Austell Brewery, said: “For a long time Bath Ales has been a company I have admired and this exciting acquisition provides the coming together of two like-minded businesses.
“Bath Ales brews great beer and has a thriving pub estate, both of which complement those of St Austell Brewery. We want to build on Bath Ales’ success to date and are committing to a long-term significant investment in the Bath Ales brands, pub estate, people and brewing facilities.”
Staughton added: “Together St Austell Brewery and Bath Ales will deliver solid and distinctive offerings to customers combining conscious innovation, service excellence and the scaling of what works.”
Roger Jones, founder of Bath Ales, said: “This is a really exciting move for Bath Ales. With the investment and broader support from St Austell Brewery we are better placed to capture the opportunity that exists for Bath Ales.
“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.”
Jones added: “From the first contact with St Austell Brewery we genuinely found people and an operation that have a consistent set of values and the same commitment to quality. The combined business will be a force to be reckoned with.”
Bath Ales, founded in 1995, has an award-winning range of beers including Gem and Barnsey. St Austell has committed to a schedule of investment to expand the brewing and packaging facilities at Bath Ales. Sales of Bath Ales' beer brands were up 18% last year.
St Austell Brewery, which is one of only 28 independent family-owned brewers in the UK, was founded in 1851 and is known to be one of the oldest businesses in Cornwall. The company has a range of beers including Tribute Cornish Ale, Proper Job PA and Korev lager.