The rumors of a possible marriage between the second and third largest brewers in the United States have been around for years. Today SABMiller and Molson Coors Brewing Co. are announcing they have signed a letter of intent to combine the two companies' U.S. and Puerto Rico operations.
Miller Brewing Co. and Coors Brewing Co. will have annual combined beer sales of 69 million barrels and net revenue of $6.6 billion. The joint venture, to be called MillerCoors, will allow the brewers to cut costs by $500 million and compete more strongly in the U.S. market. Anheuser-Busch is the dominant domestic brewer, but both imports and craft beers have been gaining share in recent years. The most valuable brand properties of both companies happen to be light beers. Miller Lite and Coors Light do battle with A-B's Bud Light and Michelob Ultra in the low calorie segment. The companies have also experienced recent successes with brands like Miller Chill and Blue Moon.
Pete Coors will become chairman of MillerCoors. SABMiller CEO Graham Mackay will serve as vice chairman of MillerCoors. Molson Coors Chief Executive Officer Leo Kiely will hold the same title in the joint venture, while Miller CEO Tom Long will be appointed president of the joint venture.
SABMiller and Molson Coors will each have a 50 percent voting interest in the joint venture and five representatives each on the board of directors. SABMiller will have a 58 percent economic interest in the joint venture and Molson Coors will have a 42 percent share.
The companies hope to close the deal by the end of 2007.
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