Transaction Represents a Game Changing Opportunity for Molson Coors
Transaction Will Strengthen Molson Coors' Position in Highly
Attractive U.S. Beer Market, Enhance Global Competitiveness, Unlock
Further Operational Synergies and Improve Tax Efficiency
Includes Compelling Opportunity to Leverage Miller Trademark
Globally
Transaction to Be Significantly Accretive to Cash Earnings in
First Full Year of Operations
Annualized Cost Synergies of at Least $200 Million Anticipated by
Year Four
Molson Coors to Host Conference Call at 9:00 AM ET
Investor Deck Posted to Company IR webpage
DENVER & MONTREAL--(BUSINESS WIRE)--Nov. 11, 2015--
Molson Coors Brewing Company (NYSE: TAP; TSX: TPX) (“Molson Coors” or
“the Company”) today announced that it has entered into a definitive
agreement with Anheuser-Busch InBev SA/NV (Euronext: ABI; NYSE: BUD)
(“AB InBev”) to purchase SABMiller plc’s (LSE: SAB; JSE: SAB)
(“SABMiller”) 58% stake in MillerCoors (“MillerCoors”), the joint
venture formed in the United States by SABMiller and Molson Coors in
2008. Molson Coors currently owns 42% of MillerCoors. Under the
agreement, Molson Coors will also acquire full ownership of the Miller
brand portfolio outside of the U.S. and retain the rights to all of the
brands currently in the MillerCoors portfolio for the US market,
including Redd’s and import brands such as Peroni and Pilsner Urquell.
The transaction is valued at $12.0 billion USD, and is conditioned upon
the closing of AB InBev’s acquisition of SABMiller, which is expected in
the second half of 2016.
The transaction will be financed through a combination of cash on hand
and proceeds from issuances of new debt and equity. Molson Coors has
received committed debt financing from Citigroup Global Markets, Bank of
America Merrill Lynch and UBS Investment Bank.
Mark Hunter, president and chief executive officer of Molson Coors
stated, “This transaction is a game-changing opportunity for Molson
Coors and advances our ambition to be the first choice for consumers and
customers. MillerCoors is a business we know very well – its strategy,
culture, brands and people – and we look forward to meeting and
exceeding the needs of our valued distributor partners and consumers
across the U.S. In consolidating ownership of MillerCoors, we will
strengthen our presence in the highly attractive U.S. beer market,
further improve our global scale and agility, benefit from significantly
enhanced cash flows, and capture substantial operational synergies.
Furthermore, the acquisition of the Miller brand rights globally will
help accelerate Molson Coors’ growth strategy by strengthening our
international beer portfolio with a powerful and authentic American
brand, as well as expand our presence in high-growth markets.
“In short, we will be a more competitive global company, better
positioned to invest behind our core brands, expand our above premium
portfolio, strengthen our commercial execution capabilities and deliver
long term shareholder value.”
Carlos Brito, Chief Executive Officer of Anheuser-Busch InBev, said,
“Our combination with SABMiller is about creating the first truly global
beer company and bringing more choices to beer drinkers in markets
outside of the U.S. We are pleased to have reached this agreement with
Molson Coors to divest SABMiller’s U.S. assets. We will continue to
proactively address any regulatory concerns regarding our combination
with SABMiller in other relevant markets.”
Molson Coors expects the transaction to add approximately $4.7 billion
in incremental revenue and more than $1.0 billion in incremental EBITDA
on a pro forma basis. The acquisition is expected to be more than 25%
accretive to Molson Coors’ cash earnings in the first full year of
operations before the benefit of synergies. Because this is an asset
transaction for U.S. tax purposes, it is accompanied by immediate,
substantial cash tax benefits that the Company estimates will exceed
$250 million annually for the first 15 years after completion. The
Company estimates a $2.4 billion net present value of these expected tax
benefits. The Company also expects to realize annualized cost synergies
of at least $200 million by the fourth full year following the
transaction, primarily from procurement improvements, supply network
optimization and operational efficiencies. Following the close, Molson
Coors would have 2014 pro forma combined worldwide volume of
approximately 106 million HL, revenues of $12.2 billion and EBITDA of
$2.5 billion.
Gavin Hattersley, CEO of MillerCoors and CFO of Molson Coors, stated,
“This is a strategic, well-timed opportunity to acquire these businesses
at an attractive price. Fully integrating MillerCoors into Molson Coors,
given our cost-saving capability and our cash-generating strength, will
allow Molson Coors to aggressively pay down debt while investing more
behind our brands and simultaneously maintaining our strong dividend
policy. As CEO of MillerCoors, I am very excited about the firepower we
can use to support our brands and restore growth in the U.S. business.”
Geoff Molson, chairman of Molson Coors’ Board of Directors, said:
“Acquiring the balance of MillerCoors is truly a great opportunity for
us, and we are thrilled to be able to capitalize on it. It will allow us
to create a more nimble North American brewer with an expanded portfolio
of iconic brands and an even stronger foundation from which to grow
internationally.”
Pete Coors, vice chairman of Molson Coors and chairman of the
MillerCoors Board of Directors, said, “While the partnership with
SABMiller has been very successful, the consolidation of MillerCoors’
ownership is a tremendous outcome for this business, its employees and
its distributor network. Upon close, we expect a seamless transition and
will continue to provide our distributors and consumers the excellence
that comes with an unparalleled passion for brewing great beers.”
In addition to the successful completion of AB InBev’s acquisition of
SABMiller, the transaction is also subject to the receipt of customary
regulatory approvals.
Molson Coors is being advised by Kirkland & Ellis LLP, Cleary Gottlieb
and UBS Investment Bank.
Conference Call and Webcast Details
Molson Coors will host a conference call and webcast for investors and
analysts today at 9:00 a.m. Eastern Time (U.S.) to discuss the proposed
acquisition. Participants will include Mark Hunter and Gavin Hattersley.
You can access the call via a live audio webcast through the investors
section of the Molson Coors website. For those unable to listen to the
live broadcast, a replay will be available on the website beginning
approximately two hours after the event through November of 2016. A copy
of the investor presentation will be made available on Molson Coors’
investor website http://phx.corporate-ir.net/phoenix.zhtml?c=101929&p=irol-IRHome.
About Molson Coors
Molson Coors Brewing Company is a leading global brewer delivering
extraordinary brands that delight the world's beer drinkers. It brews,
markets and sells a portfolio of leading brands such as Coors Light,
Molson Canadian, Carling, Staropramen and Blue Moon across The Americas,
Europe and Asia. It operates in Canada through Molson Coors Canada; in
the US through MillerCoors; across Europe through Molson Coors Europe;
and outside these core markets through Molson Coors International. The
Company is the only alcohol producer currently recognized for world
class sustainability performance through the Dow Jones Sustainability
Index. It was listed on the World Index for the past four years and
named global Beverage Sector Leader in 2012 and 2013. Molson Coors is
constantly looking for ways to improve its Beer Print. For more
information on Molson Coors Brewing Company visit the company's website, http://molsoncoors.com
or http://ourbeerprint.com.
Forward Looking Statement
This press release includes estimates or projections that constitute
“forward-looking statements” within the meaning of the U.S. federal
securities laws. Generally, the words “believe,” "expect,”
"intend,” "anticipate,” “project,” “will,” and similar expressions
identify forward-looking statements, which generally are not historic in
nature. Although the Company believes that the assumptions upon
which its forward-looking statements are based are reasonable, it can
give no assurance that these assumptions will prove to be correct.
Important factors that could cause actual results to differ materially
from the Company’s historical experience, and present projections and
expectations are disclosed in the Company’s filings with the Securities
and Exchange Commission (“SEC”). These factors include, among others,
our ability to successfully close, finance and integrate the
acquisition; our ability to achieve expected tax benefits, accretion and
cost synergies; our ability to obtain necessary regulatory approvals for
the acquisition; impact of increased competition resulting from further
consolidation of brewers, competitive pricing and product pressures;
health of the beer industry and our brands in our markets; economic
conditions in our markets; additional impairment charges; our ability to
maintain manufacturer/distribution agreements; changes in our supply
chain system; availability or increase in the cost of packaging
materials; success of our joint ventures; risks relating to operations
in developing and emerging markets; changes in legal and regulatory
requirements, including the regulation of distribution systems;
fluctuations in foreign currency exchange rates; increase in the cost of
commodities used in the business; the impact of climate change and the
availability and quality of water; loss or closure of a major brewery or
other key facility; our ability to implement our strategic initiatives,
including executing and realizing cost savings; our ability to
successfully integrate newly acquired businesses; pension plan costs;
failure to comply with debt covenants or deterioration in our credit
rating; our ability to maintain good labor relations; our ability to
maintain brand image, reputation and product quality; lack of
full-control over the operations of MillerCoors and other risks
discussed in our filings with the SEC, including our Annual Report on
Form 10-K for the year-ended December 31, 2014, which is available from
the SEC. All forward-looking statements in this press release are
expressly qualified by such cautionary statements and by reference to
the underlying assumptions. You should not place undue reliance on
forward-looking statements, which speak only as of the date they are
made. We do not undertake to update forward-looking statements,
whether as a result of new information, future events or otherwise.
View source version on businesswire.com: http://www.businesswire.com/news/home/20151111005496/en/
Source: Molson Coors Brewing Company
Molson Coors
Investor Relations:
Dave Dunnewald
303-927-2334
or
Media:
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Wheeler
303-927-2443
or
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Drew
Brown/Nathaniel Garnick/Jared Levy
212-687-8080
or
Conrad
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+44 (0)20 3713 1085