E-Malt.com News article: 3281

Canada, Montreal: Adolph Coors Company and Molson Inc. announced on Friday September 17 that Coors has filed a preliminary proxy statement pursuant to U.S. securities regulations with the Securities and Exchange Commission (SEC) in connection with the companies' previously announced merger of equals. Molson will file the final proxy statement with Canadian securities regulators at a later date, once the SEC has approved the Coors filing.

On July 22, 2004, Molson and Coors announced a definitive agreement to combine in a merger of equals. The company will be called Molson Coors Brewing Company and will be the world's fifth-largest brewing company by volume, with combined beer sales of 60 million hectoliters, or 51 million barrels, and a strong foundation of established brands in four of the world's top eight beer markets.

The combination is expected to unlock significant value for shareholders. From the outset, value creation will come from both the ability to focus marketing investments on core brands to grow revenues and the ability to capture an expected US$175 million in annualized synergies, half of which are expected to be realized within the first 18 months following completion of the merger. Secondly, a stronger overall financial platform will lead to deeper support of core brands and key markets to drive revenue, share and volume growth. Finally, the merger will create the scale and balance sheet strength to allow Molson Coors Brewing Company to compete more effectively in the increasingly global and highly dynamic brewing industry long-term.

Leo Kiely, chief executive officer of Coors, stated, "Today's filing of the preliminary proxy is an important step in the merger process. We look forward to continuing to demonstrate to our shareholders the compelling nature of this transaction, notably its ability to create shareholder value on a sustained basis. I'm confident in our ability to achieve our goals for the new organization, and I am excited to work with a strong management team that represents a balanced combination of talent from both organizations."

Daniel J. O'Neill, chief executive officer of Molson, stated, "Through the capture of US$175 million in synergies, all of which will be taken to the bottom line in the first three years, this transaction will result in a 24 percent increase in pro forma profitability above current base-line trends. Given the combined company's significant cash flow and strong balance sheet with relatively low debt levels, we will also have the financial resources to make the investments necessary to ensure the ongoing strength of our brands."

The Molson Coors Brewing Company will apply to list its shares on the New York Stock Exchange and the Toronto Stock Exchange. The proposed combination is a merger of equals as reflected in the combined company's board and share structure, management and dual headquarters. Generally accepted accounting principles in the U.S. require that one of the two companies be designated the "acquirer" for accounting purposes, and Coors has been designated the acquirer in the SEC filing made today solely for these accounting purposes. Following the closing of the transaction, Molson shareholders will own approximately 55 percent of the combined company, and Coors shareholders will own approximately 45 percent.

Shareholder approval, which is required to complete the transaction, will be solicited by the companies by means of the definitive proxy statement that will be mailed to shareholders upon completion of the SEC review process. The companies expect to complete the transaction later this year.

As previously announced, both companies' boards of directors have unanimously approved and recommended the merger of equals between Molson and Coors. After thoroughly reviewing the combination in light of other possible strategic options, each board of directors concluded that this combination offers the most significant opportunity to grow profitability and shareholder value on a sustainable basis. Additionally, as previously stated, the existing principal shareholders of Molson (Pentland Securities (1981), Inc.) and Coors (the Adolph Coors, Jr., Trust) have agreed to vote their shares in favor of the merger.

Molson is Canada's largest brewer and one of the world's leading brewers of quality beer with operations in Canada, Brazil and the United States. A global brewer with CAN$3.5 billion in gross annual sales, Molson traces its roots back to 1786, making it North America's oldest beer company. Committed to brewing excellence, Molson produces an award-winning portfolio of beers including Molson Canadian, Molson Export, Molson Dry, Rickard's, A Marca Bavaria, Kaiser and Bavaria. For more information on Molson Inc., please visit the company's website at www.molson.com.

Founded in 1873, Adolph Coors Company is the world's eighth-largest brewer, with $5.4 billion in annual gross sales. Its principal subsidiary is Coors Brewing Company, the third-largest brewer in the U.S., with a beverage portfolio that includes Coors Light, Coors Original, Aspen Edge, Killian's, Zima XXX and the Keystone family of brands. The company's operating unit in the United Kingdom, Coors Brewers Limited, is the U.K.'s second-largest brewer, with brands that include Carling -- the best-selling beer in the U.K. -- Grolsch, Worthington's, Reef and the recently launched Coors Fine Light Beer.

18 September, 2004