Cost Cuts Let Molson Coors Compete

Article Excerpt

MOLSON COORS CANADA INC. (Toronto symbols TPX.LV.A $79 and TPX.NV $79; SI Rating: Average) is a wholly owned subsidiary of Molson Coors Brewing Co., the world’s fifth-largest brewer by volume. Holders of exchangeable shares in Molson Coors Canada can swap them at any time for common shares of the parent, Molson Coors Brewing Company (New York symbol TAP), on a one-for-one basis. Now that Ottawa has eliminated foreign content limits inside registered accounts such as RRSPs, the company will probably convert its exchangeable shares to common in the next few years. The company recently sold 68% of Kaiser, Brazil’s second-largest brewer, for $68 million (all amounts except share price in U.S. dollars). Kaiser has lost money and market share in the past few years, so its sale removes a weight from Molson Coors’ future earnings. Molson Coors still owns 15% of Kaiser, which will let it profit from any upturn in the Brazilian beer market. It can also use Kaiser’s brewing and…

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