Miller and Coors to merge

[Invader3K]

From the Wisconsin State Journal:

Molson Coors, SABMiller combine U.S. operations in joint venture

By LAUREN SHEPHERD
AP Business Writer
NEW YORK (AP) -- Brewers Molson Coors Brewing Co. and SABMiller PLC plan to combine their U.S. operations in a joint venture, which the makers of Miller Lite and Coors Light said should help them compete more effectively.

The new MillerCoors, announced Tuesday, will compete with U.S. industry leader Anheuser-Busch Cos., maker of Budweiser, Michelob and Bud Light.

SABMiller will have a 58 percent economic interest in the venture and MolsonCoors will own 42 percent of the new company. They will have equal voting interests, however. Precise financial terms were not disclosed.

London-based SABMiller, which brews Miller Lite as well as a slew of European beers, and Molson Coors, the brewer of Coors Light and the craft beer Blue Moon, will each have five representatives on its board of directors.

Pete Coors, vice chairman of Molson Coors, will serve as chairman of the new company and Molson Coors Chief Executive Leo Kiely will be the new CEO of the joint venture. Tom Long, CEO of Miller, will be appointed president and chief commercial officer.

Under the terms of the agreement, the companies said they will conduct all of their U.S. business exclusively through the venture.

The companies project MillerCoors will have combined annual beer sales of 69 million U.S. barrels with revenue of about $6.6 billion.

Coors said the joint venture will allow both companies to compete for U.S. consumers who are "looking for greater choice and differentiation," as wine and spirits continue to entice beer drinkers and imports and craft beers garner a larger share of the market.

The companies said by combining their U.S. operations, the venture will be able to invest more in marketing its brands to consumers and compete more effectively with larger brewers like Anheuser-Busch and InBev NV S.A., which imports a large number of global beers into the U.S. and is the world's largest brewer by volume.

"Given the highly complementary nature of our U.S. assets, operations and geographic footprint, this is a logical and compelling combination that we expect will create significant value for shareholders while benefiting distributors, consumers, retailers and the market overall," said SABMiller Chief Executive Graham Mackay.

SABMiller shares rose 2.3 percent to 1,499 pence ($30.57) in midday trading in London.

The companies said the deal will add to both of their earnings in the second full year of combined operations.

Final approval of the deal is expected by the end of 2007, the companies said.

[The Active 33]

MillerCoors Park doesn't have a good ring to it.

[endaround]

So SABMiller has overall equity share but is installing Pete Coors to run the thing? I threw up in my mouth.

[sgtcluels]

So which plants are they shutting down then?

 

I hate coors.. and it's stupid frost lining.

[patrickgpe]

kind of odd that there will be 2 parks owned by the same company now. It makes sense in these times, i just hope there is no change to the miller line of products and i couldn't care less about crappy coors beer.

[And That]

So SABMiller has overall equity share but is installing Pete Coors to run the thing? I threw up in my mouth.

Without looking at it more closely, perhaps they thought Pete Coors was the highest-ranking American executive of the bunch. In their opinion, he knew the American beer market the best.

The thought of Miller getting on the Love Train disturbs me to end, though. Let me say that.

[funkx0r]

I love Coor's light, it's my favorite beer by far.

[Katuluu]

I love Coor's light, it's my favorite beer by far.

I have nothing but sympathy for your taste buds.

 

[RobertR]

I love Coor's light, it's my favorite beer by far.

 

Where's the blue font?

 

You've just made some German children cry. Albeit, most American beers do that.

 

Robert

[ryne100]

kind of odd that there will be 2 parks owned by the same company now. It makes sense in these times, i just hope there is no change to the miller line of products and i couldn't care less about crappy coors beer.

Isn't that kind of normal? The Mavs play in the AmericanAirlines Center and the Heat play in AmericanAirlines Arena. Thats the basically exactly the same name. I think AA loved the finals a couple years ago.

[Team Canada]

To be technically correct, no company owns a park. They just paid to get their name stuck on it.

[mothershipconnection]

My first question regarded the labor force. One beer proudly displays "union made" while the other is blasted by union groups. I wonder what the reaction of the workers is.

[Invader3K]

I'm sure a lot of people are wondering about the Milwaukee jobs right now. It sounds like it won't be known for sometime where the merged company headquarters will be, though, according to what they were saying on WTMJ this morning.

[endaround]

I love Coor's light, it's my favorite beer by far.

Coor's Light is beer for people who really don't like the taste of beer. Putting the Coors team in charge, especially Pete Coors, means that the headquarters will almost certainly be in Colorado.

 

[homer]

Putting the Coors team in charge, especially Pete Coors, means that the headquarters will almost certainly be in Colorado.

That's OK. The business/tax climate is so good in Milwaukee that those employees will have no trouble finding another job or starting another company.

[brettac1]

Hey, on the bright side, it eliminates one brewer of awful beers.

[bball123h2]

Does this mean that the Brewers are playing in the NLCS? Awesome!

[TwinsBrewersWorldSeries]

I can't imagine that the feds will allow this to go through. I mean, i guess the two combined are still half the market share as bud, but weren't antitrust laws put in place for exacty the purpose of preventing #3 and #2 or #2 and #1 from merging? Or will they look the other way as long as #1 isn't the one "absorbing" another company.

 

Not trying to be political, but i don't think its taxes that are hurting Miller BTW. I think in general their "new products" haven't met expectations, as many mid 20s somethings have gotten very attached to microbrews or the new glarus/lennies of the world. Brand loyalty is huge in beer, and i'd say 99% of miller's commericals are just downright stupid whereas the bud commercials of the early-mid 90s were funny and brilliant....

 

I site "the commish" ads, or the misguided current coors ads as "failure" in the marketing departments attempts to challenge bud for more market share

[TwinsBrewersWorldSeries]

My thought was (also) that this makes the Rockies, essentially, our brothers.... i'd say an ugly, step-child brother... but since we're the ones who missed the playoffs, and have the boob of a manager, that makes us the "younger brother"

[homer]

I think Miller owns Leinie's.

[mothershipconnection]

Word, Leinies is now a subsidiary of Miller - though the Chippewa Falls brewery is still up and running (and a very popular destination with an awesome new building/gift shop, I should add), with the Leinenkugel family still in charge.

[blatzlight]

Miller has wholly owned Leinies for over 20 yrs. Jake Leinenkugel reports directly to Tom Long (CEO of Miller Brewing). As for the LDAC 21-27 drinker moving to craft beers that is false. It is more the move of those drinkers choosing spirits as the price gap in the retail world has shrunk between beer and mixed drinks. Also, brand loyalty is becoming more and more less important to beer consumers. They are moving between beers in the same class more often than ever.

Also, funny beer ads do not sell beer.

[MelGroceryStocker]

Miller has wholly owned Leinies for over 20 yrs. Jake Leinenkugel reports directly to Tom Long (CEO of Miller Brewing). As for the LDAC 21-27 drinker moving to craft beers that is false. It is more the move of those drinkers choosing spirits as the price gap in the retail world has shrunk between beer and mixed drinks. Also, brand loyalty is becoming more and more less important to beer consumers. They are moving between beers in the same class more often than ever.

 

Also, funny beer ads do not sell beer.

 

Most of this is ridiculous. To say that "funny beer ads do not sell beer" is awfully obtuse. Does funny sell anything except tickets to stand-up? Probably not, but that's not the point. The Clydesdale, the "Wassup Guys," I could go on and on but I don't remember them all ... the point is, Budweiser's ads are water cooler talk. Miller's ads haven't been. People who don't care about brand loyalty, which is probably most of the market, think Bud when they think beer. Busch has done a great job stamping their brand into the consumer's memory. I firmly believe A-B's ads over the last 15 years are one of the primary factors causing their dominance over the market. 90% of Miller's ads are just AWFUL. They went through a phase for a while when they were probably the worst ads on TV.

 

[JoeHova]

Ugh, I hate Coors. Now two gigantic Milwaukee companies have ties to racist extremists. Oh well, what are you going to do?

[Diskono]

Most of this is ridiculous. To say that "funny beer ads do not sell beer" is awfully obtuse. Does funny sell anything except tickets to stand-up? Probably not, but that's not the point. The Clydesdale, the "Wassup Guys," I could go on and on but I don't remember them all ... the point is, Budweiser's ads are water cooler talk. Miller's ads haven't been. People who don't care about brand loyalty, which is probably most of the market, think Bud when they think beer. Busch has done a great job stamping their brand into the consumer's memory. I firmly believe A-B's ads over the last 15 years are one of the primary factors causing their dominance over the market. 90% of Miller's ads are just AWFUL. They went through a phase for a while when they were probably the worst ads on TV.

 

The Miller "+$#%" commercials from the mid-90s were the best commercials ever for any product, save perhaps the Quiznos hamsters from a few years back. I have no idea why this is.

 

edit: the shortened version of "Richard" is bad? I'm going to assume its ok when referring to a person's name.