SABMiller plc and Molson Coors Brewing Company has received antitrust approval from the US Department of Justice (DOJ).
The two companies had proposed merging their respective US and Puerto Rican operations to form a new company called MillerCoors.
SABMiller plc is amongst the largest brewers in the world, with brewing and distribution agreements across 60 countries. 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 US, SABMiller plc is also one of the largest bottlers of Coca-Cola products in the world and is listed on the London and Johannesburg stock exchanges.
The transaction is expected to close on or about 30 June 2008, while the Miller and Coors businesses will continue to be operated separately until completion of the transaction.
On 9 October, 2007, SABMiller and Molson Coors had announced that they intended to combine the US and Puerto Rico operations of their respective subsidiaries, Miller and Coors, in an equal joint venture with 50 per cent voting interest (See: SABMiller, Molson Coors merging US brewery operations) , and have five representatives each on its Board of Directors.
Based on the economic value of the contributed assets, SABMiller will have a 58 per cent economic interest in the joint venture, with Molson Coors retaining the remaining 42 per cent.
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 US 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 US 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."
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.