http://articles.moneycentral.msn.com...htBrewing.aspx
Get ready for a big fight over beer.
Molson Coors (TAP, news, msgs) and SABMiller (SBMRY, news, msgs) said they will combine their North American operations in a bid to challenge the dominance of Anheuser-Busch (BUD, news, msgs).
Wall Street loved the idea -- for Molson Coors. Its shares shot up 10.5% to $56.15 on the day, the biggest gain among stocks in the Standard & Poor's 500 Index. SABMiller was little changed at $29.80.
The joint venture, to be called MillerCoors, would have annual revenue of about $6.6 billion and yield about $500 million in annual cost savings, The Wall Street Journal said.
The combination would bring together two big players in the U.S. beer market: Miller Brewing, the second-largest U.S. brewer by sales with about 20% market share, and Coors Brewing, the No. 3 player with about 11% market share.
Anheuser-Busch controls nearly half the U.S. beer market. Its shares were down 0.9% at $51.57.
Changing tastes
The move comes as the beer giants wrestle with slower growth amid shifting consumer tastes. The mass-market brewers have been losing market share to wine and spirits companies, as well as to small-batch "craft" brewers.
Talk back: Are microbrews worth the bucks?
SABMiller will have a 58% interest in the financial results in the venture. Molson Coors will have a 42% interest.
Miller's top-selling U.S. beer is Miller Lite, while tops at Coors is Coors Light.
Analysts have long speculated that Miller and Coors would need to combine their businesses as the U.S. beer industry matures. Their combination might even force pressure on Anheuser-Busch to seek a merger partner, The Journal said.
