Miller eyes Molson

If deal with Coors fails, SABMiller may target Canadian brewer

Jan 13, 2005 - If Molson shareholders reject a proposed merger with Adoph Coors Co. then a new bidding war for Molson could emerge.


With the vote less than a week away, SABMiller indicated it is interested in buying Molson.

A merger with Molson would give SABMiller a foothold in the Canadian beer market, where Molson has a 43% share. SABMiller would be able to better distribute its Miller Lite, Pilsner Urquell and Peroni brands in Canada and could use its global distribution network to sell the Molson brand around the world.

Opponents of the Molson-Coors deal have grown more vocal as the scheduled vote approaches, and SABMiller's interest could add to the pressure on the supporters of the deal. The Wall Street Journal reported on SABMiller's interest in Molson on Wednesday.

In a statement released later in London, SABMiller said that "a Molson transaction would both have strategic merit and could be value enhancing to SABMiller."

On Tuesday, Ian Molson, who broke ranks with his family and left Molson Inc. last year, detailed his opposition to the deal, saying Molson would perform better on its own. Molson's former deputy chairman said he was disappointed he was unable to put together a rival bid and that he would vote against the merger.

Based in suburban Golden, Colo., Coors is the third biggest U.S. brewer behind Anheuser-Busch and SABMiller. Molson is the No. 1 brewer in Canada, just ahead of Interbrew SA's Labatt Brewing.

The newly combined company would have a market capitalization of about $6.3 billion and would rank fifth globally in terms of both revenue and number of barrels sold.

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