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Molson and Coors to Go Ahead With Merger Plan

July 23, 2004|From Reuters

Adolph Coors Co. and Molson Inc. tentatively agreed Thursday to merge in a deal that would create the world's fifth-largest brewer by volume.

The announcement of the deal came a day after a last-minute takeover offer for Molson from Ian Molson, a onetime company deputy chairman who resigned in June after a falling-out with Chairman Eric Molson, his cousin.

Under the Coors-Molson agreement, shareholders of Montreal-based Molson would control about 55% of the combined company, which would remain largely in the hands of the Molson and Coors families.

The deal would help the companies compete against larger rivals, including Anheuser-Busch Cos. and SABMiller, that have snatched up competitors around the globe over the last few years.

"The beer world is in a major consolidating phase," said Leo Kiely, chief executive of Golden, Colo.-based Coors. "This allows the new company to be at the table with things that neither [Molson Chief Executive Dan O'Neill] nor I could be at the table with our independent companies. There's quite a bit of purchasing power here."

Coors and Molson said they expected the deal to close this fall. Shares of Coors fell $2.33 to $72.40 on Thursday on the New York Stock Exchange.

Ian Molson sent a letter Wednesday offering to acquire the 218-year-old Canadian beer maker for about $4 billion but provided no financing details, a source said. O'Neill said the company never received a firm bid from Ian Molson.

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