Mergers and Acquisitions 09 Oct 2007 12:58 pm

Miller, Coors Join Forces

by Sean Hackbarth

Beer

Miller and Coors will merge their North American brewing operations:

Miller Brewing Co. and Coors Brewing Co., the nation’s second- and third-largest brewers, are combining their operations, creating a bigger challenger to Anheuser-Busch Cos. – but also raising the possibility of future job cuts at Miller’s Milwaukee headquarters.

For now, longtime Coors executive Leo Kiely will be running the newly merged operations of Miller Brewing and Coors Brewing.

But Miller President Tom Long is Kiely’s heir apparent, and Miller owner SABMiller Plc will be picking the MillerCoors chief when Kiely retires – perhaps within a few years.

Those facts emerged from this morning’s Webcast presentation to analysts about the agreement to combine Miller and Coors.

A decision hasn’t been made yet on where the MillerCoors headquarters will be located once the merger is completed in 2008. None of Miller’s six breweries, or the two breweries operated by Coors, will be closed as the result of the merger, said Pete Marino, Miller spokesman.

But administrative jobs in Milwaukee, and at the Coors offices in Golden, Colo., will be analyzed as the merged company looks to reduce costs, he said.

“It’s safe to assume there will be some reductions,” Marino said. But it’s too early to estimate the extent of those job cuts, and where they will occur, he said. MillerCoors will maintain a presence in both Milwaukee and Golden, Marino said.

Miller has 1,700 employees in Milwaukee, with 800 employees in the corporate offices and 900 brewery workers.

Miller itself is the result of the merger of South African Breweries and Miller Brewing while Coors is the mashup of Molson and Coors.

A changing alcohol market means new business arrangements are needed. The Milwaukee Journal Sentinel story notes that this new company hopes to be in a better position to compete with wine and spirits makers as well as Anheuser-Busch, the world’s largest beer maker.

We now have a truly pressing question: the names of the baseball stadiums in Denver and Milwaukee. I propose the Colorado Rockies play in CoorsMiller Field while the Brewers get MillerCoors Field.

Miller, Coors to Combine U.S. Operations”

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