It’s official — Miller and Coors join forces

01.07.2008 02:01 Home - Source: JS Online

As of today, Miller Brewing Co. no longer exists — other than in the hearts and minds of those who worked there, and those who drank its beer.

The company once known as Miller Brewing is now MillerCoors LLC, a joint venture of Miller Brewing and Coors Brewing Co. The new company officially begins business today, following Monday’s signing of the closing documents by executives from SABMiller Plc and Molson Coors Brewing Co., corporate parents of Miller Brewing and Coors Brewing.

MillerCoors will enjoy the benefits of a combined group of brands, led by Miller Lite and Coors Light, and a plan to cut costs by $500 million annually, according to its backers.

That will help the new company, with $7 billion in annual sales and a 29% market share, better compete with Anheuser-Busch Cos. — now the subject of an unwanted takeover bid — which has dominated the U.S. beer business with a 48% share.

“MillerCoors will be entrepreneurial, with the ability to operate with speed and agility in the marketplace, backed by the powerful combined resources of two exceptionally successful companies,” said Leo Kiely, MillerCoors chief executive officer, in a statement. “We will drive profitable growth and bring new energy to the U.S. beer industry.”

Kiely said the company’s focus is to deliver on cost savings — some of which will come through reductions in the joint venture’s work force of 9,800 employees.

It will take 18 to 24 months to completely integrate the former Miller and Coors operations into MillerCoors, which will maintain separate identities for the joint venture’s brands, including Miller High Life. Locally, landmarks such as Miller Park and the Miller Lite Oasis will keep those names.

Headquarters might move

But MillerCoors might announce within a few weeks the location of the new company’s corporate headquarters.

MillerCoors Chairman Pete Coors said in February the headquarters would probably land somewhere other than the Milwaukee or Denver areas in order to create a neutral site. Industry sources think either Chicago or Dallas could be the future home of the MillerCoors headquarters, which is expected to have a relatively small number of jobs — perhaps 50 to 100 positions.

A bigger issue could be the location of various other administrative and office functions.

MillerCoors will not close any of its eight breweries, including facilities in Milwaukee and Golden, Colo. But there will be cuts to administrative and office jobs in Milwaukee and Golden. There are 900 employees at the Milwaukee offices at 3939 W. Highland Blvd. and 800 employees at the neighboring brewery complex on W. State St.

The organizational changes announced so far indicate that the job cuts will likely be distributed fairly evenly between Wisconsin and Colorado. The joint venture is owned 50/50 by London-based SABMiller and Molson Coors, with offices in Montreal and Denver.

MillerCoors’ senior executive team consists of seven executives from Miller and seven from Coors. The new company’s top two executives are Kiely, former Molson Coors CEO, and Tom Long, former Miller Brewing president who is MillerCoors president and chief commercial officer.

Also, the new company has an Eastern division based in Milwaukee, and a Western division based in Golden.

Finally, of the nine newly named regional vice presidents, six are former Coors executives and three are former Miller executives. One of the nine regional offices, encompassing the Great Lakes area, is based in Milwaukee. Another office, for the Mountain region, is in Golden.

Long and other executives have said MillerCoors will continue Miller’s tradition of providing a high level of charitable support in Milwaukee.

Miller spent more than $5.1 million, or 1.4% of its pretax profit, during the fiscal year that ended March 31 on community initiatives in Milwaukee and five other cities where Miller operated breweries, according to a company report.

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