GOLDEN, COLO. Adolph Coors Co. shareholders overwhelmingly approved a merger with Canada's Molson Inc. on Tuesday, one of the last steps in a $3.4 billion deal that will combine two family-run breweries hoping to keep up with the race for new international markets.
The deal won support from 92 percent of Coors stockholders, the company said. It was approved last week by Molson shareholders.
"This is a momentous time for our company," said Peter Coors, board chairman of Coors. "Coors and Molson were both founded by bold pioneers in their own time, and our family looks at this merger as a pioneering step in its own right."
A hearing in Quebec Superior Court is scheduled for today for final approval. The deal is expected to close Feb. 9.
The new Molson Coors Brewing Co. would have 15 breweries and nearly 15,000 employees making brands such as Molson Canadian, Coors Light, Carling, Keystone, Aspen Edge, Zima, Rickard's and Kaiser.
The new brewer would rank fifth globally in both revenue and barrels sold. It would have a 43 percent market share in Canada, 21 percent in Britain and 11 percent in each of the United States and Brazil, where Molson has struggled.
Coors and Leo Kiely, the company's chief executive, toasted the merger at a news conference, with the chairman drinking a Molson and Kiely drinking a Coors Light. Both said they expected the merger to help the companies survive in an environment of consolidation.
"The goal is to have a generationally sustainable brewing company, and that's good for our employees," said Kiely, who added there would be layoffs and other changes.
"There are some overlaps and redundancies, of course, and those are the tough decisions to endure in the beer business," Kiely said.
Coors called the merger bittersweet.
"When you look at our long history here as a single company, it's a miracle we were able to achieve by surviving and prospering," said the silver-haired Coors, the TV face of the brewery and a Republican who lost last year's race for Colorado's open U.S. Senate seat.
Coors and Molson expect their union to generate cost savings of $175 million a year by 2007 by optimizing the Canadian brewery network, making material procurement more efficient, streamlining the organization and improving tax efficiencies.
The company would have dual headquarters in Montreal and Denver, with U.S. operations based at the Coors' brewery complex west of Denver and the Canadian operations managed from Toronto.
Analysts said the combined company would be in a much better position to challenge industry giants Anheuser-Busch Cos., SABMiller PLC and others in the battle for China and other overseas markets as beer sales remain flat in North America.
|Adolph Coors Co. shareholders overwhelmingly approved a merger with Canada's Molson Inc. on Tuesday. The deal creates the new Molson Coors Brewing Co. is expected to close next week.The combination of the two family-run breweries is expected to challenge industry giants like Anheuser-Busch Cos. and SABMiller PLC for growing overseas markets.The new company makes brands such as Molson Canadian, Coors Light, Carling, Keystone, Aspen Edge, Zima, Rickard's and Kaiser.|
Molson is facing diminishing market share in Canada and is still grappling with problems stemming from its Brazilian acquisition of Kaiser in 2002.
Coors, meanwhile, has seen sales of leading brand Coors Light fall off in the United States, analysts say. Coors is the third-biggest U.S. brewer after Anheuser-Busch, which makes Budweiser, and SABMiller's Miller Brewing unit, which makes Miller Lite.
The history between Molson and Coors began in 1998 when they began selling each other's products in their respective countries.