NEW YORK Molson Coors Brewing Co. and SABMiller PLC announced plans today to combine their U.S. operations, creating a formidable presence in the American beer industry. The deal is expected to close in 2008, according to the Wall Street Journal.
The joint venture will have annual revenue of $6.6 billion and yield $500 million in annual cost saving. The combination, to be called MillerCoors, brings together the second-largest U.S. Brewer, SABMiller, with the No. 3 player Coors. Anheuser-Busch, the companies’ largest competitor, takes in nearly half the market.
The move comes as mass-market brewers deal with slowing growth and shifting consumer tastes, losing market share to wine and spirit companies, as well as to smaller, craft brewers. The two companies will share control of the venture, but because of the economic value of their respective units SABMiller will have a 58 percent economic interest to Molson Coors’ 42 percent. Pete Coors, vice chairman of Molson Coors, will serve as chairman of the venture, while Molson Coors Chief Executive Leo Kiely will be chief executive officer.
“As a result of this combination, Miller and Coors will be able to provide more focused support for our flagship brands, while taking full advantage of consumers’ demand for imported and craft brands and innovative products,” said Kiely.