In a major industry shift among the major brewers, Miller Brewing Co. and Coors Brewing Co., are combining their operations.
None of Miller’s six breweries, or the two breweries operated by Coors, will be closed as the result of this morning’s surprise announcement, said Pete Marino, Miller spokesman.
The merged company, dubbed MillerCoors, will maintain a presence in both Milwaukee and Golden. But no decision has been made yet as to where the headquarters for MillerCoors will be.
This will have significant impact on the competitive landscape among what is now two major brewers in the U.S. The new company will have a roughly 29% market share compared to rival Anheuser-Busch which currently has a 48% percent share of market.
The merger may also have long-term implications in the distribution network, where it will likely accelerate and already rapid pace of consolidation.
SABMiller and Molson Coors will each have a 50% interest in the joint venture, and have five representatives each on its board of directors. Based on the value of the assets, SABMiller will have a 58% economic interest in MillerCoors, and Molson Coors will have a 42% economic interest.
SABMiller and Molson Coors expect the merger to generate $500 million in annual cost savings by the third full year of combined operations. The merger is subject to reaching a final agreement, and obtaining clearance from antitrust regulators.
Pete Coors, vice chairman of Molson Coors Brewing Co., the Montreal-based corporate parent of Coors, will be chairman of MillerCoors. Graham Mackay, chief executive officer of SABMiller Plc, the London-based brewer that owns Miller, will be vice chairman of MillerCoors.
Leo Kiely, CEO of Molson Coors, will be the CEO of MillerCoors, and Tom Long, CEO of Miller, will be president and chief commercial officer of the merged company.