Beer giants mull merger

NEW YORK – Adolph Coors of the United States and Canada’s Molson on Monday confirmed they were in discussions about a possible “merger of equals”.

A joint statement from Golden, Colorado, home of Coors, said the firms were in “advanced discussions concerning a possible merger of equals between the two companies, the terms of which are still being discussed and are subject to final board approvals.” A potential tie-up between the two breweries would not be without irony in Canada.Molson has aggressively marketed its premier brand “Canadian” comparing it to supposedly inferior American beers, and championing the Canadian lifestyle and customs over those south of the border, suggesting beer drinkers in Canada are more discriminating – using the slogan “I am Canadian.”The Financial Times reported earlier that the two family-run companies were discussing a possible combination, which would create an alcohol multinational with about US$6 billion (N$35,5 billion) in sales.The pair already has joint ventures through which each markets the other’s beers on its home turf; a relationship that has been in place since 1998.Both companies have been suffering in the face of consolidation and strong market-share gains by competitors, including Anheuser-Busch, SABMiller and Interbrew.In note to investors, Bear Stearns analyst Carlos Laboy wrote that “a merger would not make much sense for either party but that an alarm bell has been sounded for potential suitors to get going.”Although it “could be bad for both stocks, a sale of either would benefit one, while hurting the other,” he continued.The two firms said that the terms being discussed include Molson chairman Eric Molson becoming chairman of a combined firm.Leo Kiely, currently Coors’ chief executive officer, would hold that title if the firms are combined.”An announcement could be made in the near future,” the statement said.”There can be no assurance that a transaction will take place.”-Nampa-AFPA potential tie-up between the two breweries would not be without irony in Canada.Molson has aggressively marketed its premier brand “Canadian” comparing it to supposedly inferior American beers, and championing the Canadian lifestyle and customs over those south of the border, suggesting beer drinkers in Canada are more discriminating – using the slogan “I am Canadian.”The Financial Times reported earlier that the two family-run companies were discussing a possible combination, which would create an alcohol multinational with about US$6 billion (N$35,5 billion) in sales.The pair already has joint ventures through which each markets the other’s beers on its home turf; a relationship that has been in place since 1998.Both companies have been suffering in the face of consolidation and strong market-share gains by competitors, including Anheuser-Busch, SABMiller and Interbrew.In note to investors, Bear Stearns analyst Carlos Laboy wrote that “a merger would not make much sense for either party but that an alarm bell has been sounded for potential suitors to get going.”Although it “could be bad for both stocks, a sale of either would benefit one, while hurting the other,” he continued.The two firms said that the terms being discussed include Molson chairman Eric Molson becoming chairman of a combined firm.Leo Kiely, currently Coors’ chief executive officer, would hold that title if the firms are combined.”An announcement could be made in the near future,” the statement said.”There can be no assurance that a transaction will take place.”-Nampa-AFP