Miller and Molson Coors to Merge in U.S.

By MICHAEL M. GRYNBAUM
Published: October 9, 2007 - NT Times

SABMiller and Molson Coors announced today that will merge their United States and Puerto Rican operations in an effort to better compete against Anheuser-Busch and the increasing popularity of wine and other spirits.

The joint venture, which will be known as MillerCoors, places several of the nation’s most recognizable beer brands under a single concern. Miller will hold a controlling 58 percent stake in the venture, though the companies will split voting interest.

The companies said they expect to save $500 million in annual costs from the deal, which is expected to close at the end of the year. The companies estimate net revenue of the businesses at $6.6 billion.

“This transaction is driven by the profound changes in the U.S. alcohol beverage industry that are confronting both of our companies with new challenges,” Pete Coors, the vice chairman of Molson Coors, said in a statement today. “Creating a stronger U.S. brewer will help us meet these challenges, compete more effectively and provide U.S. consumers with more choice, greater product availability and increased innovation.”

Shares of Molson Coors shares were up 9 percent in morning trading, at $55.62, while SABMiller rose 2.6 percent in midday London trading.

Both companies face formidable competition in the American market from arch rival Anheuser-Busch, the country’s largest brewer.

SABMiller’s brands include Miller genuine Draft, Milwaukee’s Best and imported drinks like Peroni Nastro Azzurro and Pilsner Urquel. Molson Coors brews Molson Canadian, Carling, Coors and Keystone Light, among other brands.

ha ha ha

the megolithic giants join forces to fight the evil powers of AB

one world...one beer for the mass market consumer of tasty beverages

i don't know if they realize that they're not being beaten by AB as mush as by the growing number of educated beer drinkers that refuse to tolerate swill beer

drink great beer and continue to support your local independent breweries

and

drink great microbrewed beers from around the country and the world


i wonder what new sensational sales tactics this giant will use

I heard this story on NPR. The reporter said that these companies already control over half of the U.S. beer market, but have lost market share to spirits, wines and independent breweries and imports.

I really do not get this merger. They are combining very similar products in the same market space. Honestly, how much difference is there in Miller Lite and Coors Light? They use the same rice and other fillers for ingrediants. Other than that Rocky Mountain water that Coors uses, there is no difference.

They claim that there will be huge savings in transportation and brewing by being able to combine their existing locations so that product will be brewed closer to the individual markets. I guess that is one good reason, but they are such huge competitors for the same market space that is being eroded away by superior products, merging into one large company is not going to solve the issues that plague them today.

todd is correct of course

how does this merger benefit coors/miller?

by allowing them to bottle and produce nearly indentical products in one location

my guess is there will a significant number of brewing/bottling facilities that will cease to be utilized by the coors/miller brand and eventually one of the two BRANDS will be pulled from the market

coors and miller have shared distributors in kentucky and indiana for a while now (maybe elsewhere across the US as well)
so the merger shouldn't have a significant impact on distribution

my guess is that "down sizing" the giant is in the future
- less bottling/brewing facilities, fewer sales reps, and fewer costs for the company = higher profit

and isn't that what these companies are all about - they've never had an interest in producing quality beer - only beer that will sell in mass quantities

so let us enjoy the downfall of commercial beer as the big 3 become the not so big 2

An interesting point in their press release is the subject of brewing beers closer to the market. Does this mean that Coors will drop the exclusive use of "Water from the Rockies" in their marketing? That's about the only thing they can claim as exclusive. They're already a bad beer and only exist because a good marketing if they lose their marketing advantage they ought to be nonexistent very rapidly, which is a good thing for all of us.

There are very few mass marketed beers that are worth drinking in this combined company will not have any of them. It's just another step in reverting to how beer started with lots of small local breweries!