Love is in the air

Molson Inc. announced at the beginning of February this year that it had received the final court approval for its USD4 billion merger with Adolph Coors Co., after both sets of shareholders voted overwhelmingly in favour of the union.
The merger will create the world’s fifth largest brewer by volume behind Heineken with annual sales of more than USD6 billion. The new company, to be called Molson Coors Brewing Co., will have a 43 percent market share in Canada and 11 percent in the United States, with brands such as Molson Canadian and Coors Light.
On the announcement, shares of Molson rose 7 Canadian cents to CD38.77 on the Toronto Stock Exchange. On the New York Stock Exchange, Coors’ shares fell 11 cents to USD74.90. Well, thanks for that gentlemen.44 a share, up from CD3.26..

Phew – a deal that seemed to have lacked in conviction, enthusiasm and perhaps even necessity right from the start has finally been settled. For a long time it looked as if the merger would fall through, having been met with opposition from some Molson shareholders. As recently as January this year, Molson and Adolph Coors Co. had to sweeten the merger deal between the Canadian and U.S brewers and delay shareholder votes on the plan. The companies said the dividend slated to be paid to holders of Molson class A non-voting and class B common shares would be CD5.
By sheer coincidence, of course, this announcement came a day after SABMiller said it would welcome talks with Molson if the proposed merger with Coors failed. Surprise, surprise – the amended deal quickly won the support of one major Molson stakeholder.
Molson and Coors first announced in July they had an all-share deal to create the world’s fifth-largest brewer. When shareholders mumbled and grumbled they sweetened the plan in November by announcing the special dividend. The dividend increase now puts the total payout at about CD640 million (USD532 million), the companies said.
Under the merger agreement, Molson shareholders would control about 55 percent of the combined company, which would remain largely in the hands of the Molson and Coors families.