Anheuser-Busch's 2 biggest rivals SABMiller PLc and Molson Coors Brewing are joining forces to combine their U.S. and Puerto Rico divisions. The combined venture, MillerCoors, boasts a shared revenue of $6.6 billion and projected annual U.S. beer sales of 69 million barrels. The deal aims to generate annual cost synergies of approximately $500 million starting by the third full financial year of the partnership. What's more, the venture expected to close at the end of the year should positively impact both companies' earnings by the second full financial year.
Both SABMiller and Molson will enjoy a 50% voting interest, but Miller holds a 58% economic interest to Molson's 42%. Vice Chairman Pete Coors be chairman of MillerCoors and SABMiller chief executive Graham Mackay will take the vice-chairman role. Leo Kiely currently the chief executive of TAP, will be chief executive of MillerCoors, while SABMiller CEO Tom Long will serve as president and chief commercial officer.
Pete Coors noted in a press release that This transaction is driven by the profound changes in the U.S. alchohol beverage industry that are confronting both of our companies with new challenges ... consumers are broadening their tastes and are increasingly looking for greater choice and differentiation. Coors added that Creating a stronger U.S. brewer will help us meet these challenges (of rising demand for wine and spirits).