SABMiller and Molson Coors receive U.S. Department of Justice clearance to proceed with MillerCoors joint venture
5 June 2008
SABMiller plc (SAB.L) and Molson Coors Brewing Company (NYSE: TAP; TSX) today announced that they have been informed by the Antitrust Division of the U.S. Department of Justice (“DOJ”) that the DOJ has completed its Hart-Scott-Rodino antitrust review of their proposed joint venture and has closed its investigation. The parties are therefore free to proceed with the combination of their respective U.S. and Puerto Rico operations to form a new company called MillerCoors.
SABMiller and Molson Coors expect the transaction to generate approximately $500 million in annual cost synergies to be delivered in full by the third full financial year of combined operations.
Graham Mackay, SABMiller’s Chief Executive, said: "We are very pleased the U.S. Department of Justice has given us clearance to proceed with the planned MillerCoors joint venture. Today’s news underscores our strong belief that this combination will not only generate significant growth and cost synergies, but will also create tremendous opportunities for innovations in products and services that will greatly benefit America’s beer distributors, retailers and consumers."
Leo Kiely, Chief Executive Officer of Molson Coors, added: “MillerCoors is quickly moving toward becoming a reality, and I’m looking forward to working with the entire team to build on our momentum and grow our leading brands and consumer offerings. While we recognize that regulatory clearance is just one step in creating a dynamic U.S. competitor, it is a critical milestone, and we’re obviously very happy about the outcome. We’re actively engaged in the various planning elements and are ready to get out of the gate smoothly and quickly upon close.”
The closing of the joint venture transaction is expected to take place on or about June 30, 2008. The Miller and Coors businesses will continue to be operated separately and in the ordinary course until completion of the transaction.
Transaction History and Key Facts
On October 9, 2007, SABMiller and Molson Coors Brewing Company announced that they had agreed to combine the U.S. and Puerto Rico operations of their respective subsidiaries, Miller and Coors, in a joint venture.
SABMiller and Molson Coors will each have a 50% voting interest in the joint venture and have five representatives each on its Board of Directors. Based on the economic value of the contributed assets, SABMiller will have a 58% economic interest in the joint venture and Molson Coors will have a 42% economic interest.
Overview of SABMiller
SABMiller plc is one of the world’s largest brewers, with brewing interests or distribution agreements in over 60 countries across six continents. The group’s brands include premium international beers such as Miller Genuine Draft, Peroni Nastro Azzurro, Grolsch and Pilsner Urquell, as well as an exceptional range of market leading local brands. Outside the USA, SABMiller plc is also one of the largest bottlers of Coca-Cola products in the world. In the year ended 31 March 2008, the group reported $ 3,639 million adjusted pre-tax profit and revenue of $ 21,410 million. SABMiller plc is listed on the London and Johannesburg stock exchanges.
For more information on SABMiller plc, visit the company's website: www.sabmiller.com.
Overview of Molson Coors
Molson Coors Brewing Company is one of the world’s largest brewers. It brews, markets and sells a portfolio of leading premium-quality brands such as Coors Light, Molson Canadian, Molson Dry, Carling, Coors, and Keystone Light. It operates in Canada, through Molson Canada; in the US, through Coors Brewing Company; in the UK and Ireland, through Coors Brewers Limited. For more information on Molson Coors Brewing Company, visit the company’s Web site, http://www.molsoncoors.com.
Overview of Miller
Miller produces, markets and sells the Miller portfolio of brands in the U.S. The Miller business to be contributed to the joint venture (the “Miller Business”) does not include the sales of Miller brands outside the U.S., but does include the sale of other SABMiller brands in the U.S.
Overview of Coors
Coors produces, markets and sells the Coors portfolio of brands in the U.S. and Puerto Rico, which is managed as an integral part of the U.S. business, and also holds 50% interests in the Rocky Mountain Metal Corporation and Rocky Mountain Bottle Corporation joint ventures. The Coors business to be contributed to the joint venture (the “Coors Business”) will not include the sales of Coors brands outside the U.S. and Puerto Rico. The business to be contributed does include the sale of other Molson Coors brands in the U.S. and Puerto Rico.
This announcement is for information only and does not constitute an offer or an invitation to acquire or dispose of any securities or investment advice or an inducement to enter into investment activity. This announcement does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire the securities of SABMiller or Molson Coors (the "Companies") in any jurisdiction.
The distribution of this announcement may be restricted by law. Persons into whose possession this announcement comes are required by the Companies to inform themselves about and to observe any such restrictions.
This press release includes “forward-looking statements” within the meaning of the U.S. federal securities laws, and language indicating trends, such as “anticipated” and “expected”. It also includes financial information, of which, as of the date of this press release, the Companies’ independent auditors have not completed their review. Although the Companies believe that the assumptions upon which their respective financial information and their respective forward-looking statements are based are reasonable, they can give no assurance that these assumptions will prove to be correct. Important factors that could cause actual results to differ materially from the Companies’ projections and expectations are disclosed in Molson Coors’ filings with the Securities and Exchange Commission and in SABMiller’s annual report and accounts for the year ended 31 March 2007 and in other documents which are available on SABMiller’s website at www.sabmiller.com. These factors include, among others, changes in consumer preferences and product trends; price discounting by major competitors; failure to realize anticipated results from synergy initiatives; failure to obtain regulatory consents or other third party approvals; and increases in costs generally. All forward-looking statements in this press release are expressly qualified by such cautionary statements and by reference to the underlying assumptions. Neither SABMiller nor Molson Coors undertakes to update forward-looking statements relating to their respective businesses, whether as a result of new information, future events or otherwise. Neither SABMiller nor Molson Coors accepts any responsibility for any financial information contained in this press release relating to the business or operations or results or financial condition of the other or their respective groups.
For further information, please contact:
SABMiller / Miller
Tel: +44 20 7659 0100/ 414 931-6313
Nigel Fairbrass Media Relations, SABMiller
Mob: +44 7799 894265
Molson Coors / Coors
Media Relations, Molson Coors
Tel: 303 277-2555