Merger Expands U.S. Market Share

Article Excerpt

MOLSON COORS CANADA INC. (Toronto symbols TPX.A $50 and TPX.B $56; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 179.3 million; Market cap: $10.0 billion; SI Rating: Average) has gained roughly a third in the past year, mainly due to its success in cutting costs following the merger of Molson and Coors in February 2005. The company now aims to cut costs by a further $500 million a year with an agreement to merge its operations in the United States and Puerto Rico with those of SAB Miller PLC (all amounts except share price and market cap in U.S. dollars). Molson Coors earned $1.02 a share (total $184.3 million) in the second quarter of 2007. Each will have 50% voting interest in new venture, called MillerCoors, but Miller will have a 58% economic interest while Molson Coors will have 42%. This new business will have 27% of the U.S. beer market. That should help it compete with Anheuser- Busch, which accounts for about…

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