Miller, Molson Coors deal gets closer
22.12.2007 02:00
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- Source: JS Online
The planned combination of Miller Brewing Co. and Coors Brewing Co. moved another step ahead Friday. Corporate owners SABMiller Plc and Molson Coors Brewing Co. said they have signed a definitive agreement to combine the two brewers into the MillerCoors LLC joint venture. That 105-page agreement, filed with the Securities and Exchange Commission, lays out specific terms and conditions for the combination, which was announced on Oct. 9 by London-based SABMiller Plc and Molson Coors, which splits its corporate offices between Denver and Montreal. The proposed joint venture still needs antitrust approval from the U.S. Department of Justice, and the transaction isn't expected to be final until the middle of 2008. Until MillerCoors officially becomes a company, executives from Milwaukee-based Miller Brewing and Golden, Colo.-based Coors Brewing will not be commenting on where the joint venture's corporate headquarters might be located, spokesmen from both companies said. The joint venture is designed to cut annual costs by $500 million, including the reduction of administrative and office employees. Miller has 800 employees at its headquarters, at 3939 W. Highland Blvd., and 900 employees at the neighboring brewery complex. The MillerCoors joint venture will not close any of the six breweries operated by Miller or the two breweries operated by Coors. But the corporate headquarters could end up consolidated in either Milwaukee or the Denver/Golden area. The agreement is "an important step forward towards completing the MillerCoors joint venture," said Graham Mackay, SABMiller chief executive, in a statement. Mackay and Leo Kiely, chief executive of Molson Coors, said the combination will create a stronger brewer and allow Miller and Coors to better compete with Anheuser-Busch Cos., which has a U.S. market share of 48%. The combination of Miller, the nation's No. 2 brewer, and Coors, the third-largest U.S. brewer, would provide MillerCoors with a 29% market share. SABMiller and Molson Coors will each have a 50% voting interest in MillerCoors. But, based on asset value, SABMiller will have a 58% economic interest in MillerCoors. That means 58% of the joint venture's income will flow to SABMiller. Kiely will be CEO of MillerCoors and will serve at least two years. He is expected be succeeded by Miller President Tom Long, who will be MillerCoors' president and chief commercial officer. Pete Coors, Molson Coors vice chairman, will be chairman of MillerCoors but will not have an executive position. Mackay will be vice chairman of MillerCoors.
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