DENVER -- Close on the heels of Anheuser-Busch InBev (ABI) gaining U.S. Department of Justice (DOJ) approval to purchase SABMiller, Molson Coors Brewing Co. earned the regulator's consent on July 20 to acquire SABMiller's share of the U.S. joint venture MillerCoors.
"We are still awaiting additional closing conditions for the AB InBev-SABMiller merger to be completed, but we are now well on our way to closing our transaction, which we expect will be completed before the end of the year,” said Mark Hunter, president and CEO of Denver and Montreal-based Molson Coors, which already owns 42% of the venture.
Molson Coors plans to acquire SABMiller’s 58% stake in Chicago-based MillerCoors, as well as the Miller beer brand portfolio outside of the United States, for $12 billion.
“This represents a critical milestone on our journey to take full control of MillerCoors upon the closure of the AB InBev-SABMiller merger," Hunter said. "The acquisition will allow us to simplify decision-making and reduce the complexities of dual ownership. It will allow us to become a more integrated and efficient brewer, and it will allow us to become a more effective competitor as a single owner, promoting consumer choice in an increasingly diverse and fast-growing brewing industry.”
The regulatory clearance is the next step in what Sonia Pfaffenroth, deputy assistant attorney general of the DOJ’s Antitrust Division, called a remedy to "help preserve and promote competition in the multibillion dollar U.S. beer industry. The two largest U.S. brewers—ABI and MillerCoors—will now remain independent competitors after the deal.”
Pfaffenroth oversaw the U.S. regulatory review of the proposed merger of Leuven, Belgium-based ABI and London-based SABMiller.
That $107 billion deal, when first proposed in November 2015, led industry watchers to question just how much of the U.S. beer market a single brewer would be allow to own; a straight combination of the two companies would have given the new entity almost 72% share of the entire country and as high as 94% some local markets.
With the entirety of MillerCoors in Molson Coors’ hands, share of the U.S. beer market will remain as it is—about 47% for ABI and 25% for MillerCoors.
That's no surprise. AB InBev CEO Carlos Brito has always said that his drive to purchase SABMiller was a desire to "create the world’s first truly global brewer.”
“Our combination with SABMiller will bring more choice to more beer drinkers—and extend the global reach of our iconic American brands, such as Budweiser—in markets outside of the U.S," he said this week.
However, his company still has big plans for the United States, as well.
“We will continue to invest heavily in the U.S., including our efforts to build our entire portfolio of brands, support and incentivize our wholesalers, and compete effectively in a dynamic and fast-changing market," Brito said. "While we will make some adjustments to certain aspects of our U.S. sales programs and policies, our fundamental approach and commitment to this market will not change. We will continue to compete and win in the U.S. marketplace going forward.”
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