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SABMiller and Molson Coors to Combine U.S. Operations in Joint Venture
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| PLGA Global member, Annette Crampton, is the Senior Manager of Packaging Development of Miller Brewing Company. She has served as the PLGA Global Marketing Committee Chairperson and is currently on the PLGA Global Board of Directors. |
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Merger will create a stronger, more competitive U.S. brewer
Founder, Frederick J. Miller, one of the early pioneers of bottling beer, began his brewing business in 1855 when he purchased a small brewery called the Plank Road Brewery in Milwaukee, Wisconsin. Since then, Miller Brewing has grown from a small local brewer to the second largest brewery in the U.S., with seven major breweries located across America. In 1969, the Philip Morris Corporation purchased Miller Brewing Company, and in 2004, it became part of South African Breweries, forming one of the largest brewers in the world, called SABMiller, with a volume of more than 130 million barrels, operations in 40 countries and hundreds of brands.
On October 9, 2007 SABMiller and Molson Coors Brewing Company announced that they have signed a letter of intent to combine the U.S. and Puerto Rico operations of their respective subsidiaries, Miller and Coors. This joint venture will to create a stronger U.S. brewer with the scale, resources and distribution platform to compete more effectively in the increasingly competitive U.S. marketplace. It will allow additional investment in brands, product innovation and sales execution.
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The new company will be called MillerCoors and will have annual combined beer sales of 69 million U.S. barrels with net revenues of approximately $6.6 billion. The transaction is subject to reaching final agreement, which is expected by the end of 2007. Closing of the transaction is also subject to obtaining clearances from the U.S. competition authorities and certain other regulatory clearances and third-party consents as required. The transaction will require the approval of a majority of Molson Coors’ Class A common and exchangeable shareholders, which is expected to be given at the time of signing the definitive agreements from the Molson and Coors families, who own a majority of such shares.
Pete Coors, Vice Chairman of Molson Coors, will serve as Chairman of MillerCoors. Graham Mackay, SABMiller CEO, will serve as Vice Chairman of MillerCoors. Leo Kiely, current CEO of Molson Coors, will be the CEO of the joint venture, and Tom Long, current CEO of Miller, will be appointed President and Chief Commercial Officer. Each company will contribute five representatives to the new Board of Directors.
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