Coors, Molson Agree to Merge Breweries
 

Adolph Coors Co. and Canada's Molson Inc. announced a plan Thursday to combine their family-run breweries into the world's fifth-largest beermaker and better position themselves to pursue growing overseas markets.

With combined annual revenue of $6 billion, the newly formed Molson Coors Brewing Co. would be able to compete as rivals gain more global muscle and industry looks to new markets in China and South America amid a flat market in the United States.

The company would have a 43 percent market share in Canada, 21 percent in the United Kingdom and 11 percent in each of the United States and Brazil, where Molson has struggled.

Coors is third in the U.S. behind Anheuser-Busch and SABMiller while Molson is in a tight race with Interbrew SA's Labatt Brewing in Canada. In terms of both revenue and number of barrels sold, the combined company would be fifth globally.

"This transaction gives us the critical mass to be a real player in a rapidly consolidating industry," said Coors chief executive Leo Kiely.

The deal would merge two family-led breweries both founded more than a century ago and would unite brands like Coors Light, Molson Canadian and Carling.

"Since Molson's first issuance of stock in 1945, the Molson family has not wavered in its commitment to build a company that will withstand the test of time," Molson chairman Eric Molson said.

"Rather than shake our resolve, the reshaping of this industry has increased our determination to participate in that consolidation but on our own terms and on terms we believe would be favorable to all our stockholders."

The history between the two companies began in 1998 when they began selling each other's products in their respective countries. Several years ago, they began talking about a potential merger, negotiations that began taking shape three or four months ago, Kiely said.

Coors and Molson said their combination should generate $175 million a year by 2007 in cost savings by optimizing the brewery network in Canada, making material procurement more efficient, streamlining the organization and improving tax efficiencies.

Kiely said no decisions had been made yet on whether there would be layoffs.

http://www.forbes.com/business/manuf...ap1466820.html

Is this merger good for beer? Please discuss.

I have to think if there are changes made to the Molson operation it will hurt their Canadian market share.... but that aside I can be pretty sure that they will lose some share because of this... after all their entire marketing strategy over the past decade has been "I Am Canadian" with the advertising playing on Canadian nationalism... so any percieved connection with the American brewer will damage this image.

However the I can also see the beer industry becoming more diverse and healthy as a result... if people turn from Molsons they are more likely to switch to one of the micro-brews.

Re: Coors, Molson Agree to Merge Breweries
 

All I know is that anyone who touches this deal is going to be painting their pockets green.

-Rudey

To be honest, I think both companies' beer suck. Mixing them together can't make it that much worse. :p

Well other than watering it down :)

I agree. Even living in Colorado, I don't know anybody who actually drinks Coors -- with all the amazing microbrews that come from this state, why would you?!

For those of you who have heard me tell this story before, sorry.

My first night in Denver after moving from Detroit, I was in a downtown pizza place/bar. On the wall above the urinal it said, "Flush twice, it's a long way to Golden."

As a person who works for a small"er" regional brewer this quite honestly scares me. While AB controls over 50% of the market, everytime there is a merger it spells death for a few more local regional breweries.

Look at Rolling Rock...people still think it's a local beer here in southwestern pennsylvania and while yes it is produced locally it's owned by Interbrew a Canadian company and it isn't really a brand that's hurting. Interbrew is actually the BIGGEST globally with its most recent acquisition (which is slipping my mind right now- some brewing company abroad).

All I have to say is SUPPORT YOUR LOCAL BREWERY!

Really I'm off my soapbox now.

this is why I never read the beer related threads

I'll stick with Woodchuck.

I know lots of girls that like cider.

-Rudey

Isn't the biggest breweries Anheuser-Busch, with SABMiller being the second?

I totally agree - Sleeman's and the Brick Brewery ALL the way!

Haven't heard that one but that is TOO FUNNY! http://instagiber.net/smiliesdotcom/...ackeye/lol.gif

Yes.

http://media.mnginteractive.com/medi...merger0720.jpg

-Rudey

ummmm m. . . which brewery do you work for?


I sell beer/wine, and from the point-of-sale end we've seen a renaissance in craft brew sales. Bud sales are down 20% across the board in the midwest, their traditional stronghold, and our craft brews are up between 10 and 200%, depending on the distributor (put THAT in your pipe - the actual beer makes little difference, it's solely based on distributor and POS support).

The bottom line? If you're getting hurt by this merger, you need to change your strategy. The merger is happening precisely b/c of a shifting marketplace in which Coors has trouble competing, b/c the pie is being cut into many more pieces. Bud was around 71% marketshare just three years ago . . .

There are success stories and there are pending disasters - Rogue, in Oregon, is a total success story, while I personally feel New Belgium is shitting the bed w/ their inability to get Fat Tire etc through state ABDs and to new consumer bases. Which one is your brewery?

Why are you scared?