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Canada's Competition Bureau said Wednesday, October 13, it has no objection to the proposal to merge brewers Molson Inc. of Montreal and Adolph Coors Co. of Golden, Colo., according to Asia News. A spokesman said the agency reviewed the proposed deal, announced last July, and did not find any reasons to block it. "We reviewed it and it raised no issues under the Competition Act," spokesman Tim Weil said.

The U.S. Federal Trade Commission gave its nod to the deal last week. With these administrative hurdles behind them, the brewers expect their joint proxy circular filed Sept. 18 to be cleared by the U.S. Securities and Exchange Commission by mid-November. It would then be submitted to Quebec Superior Court and mailed to Molson shareholders. A vote by Molson shareholders is tentatively scheduled for the week of Dec. 13.

If two-thirds of both classes of shareholders vote in favor, the two brewers would together become the third-largest beer maker in North America, with combined sales of about $6 billion.

Some institutional investors are balking at the deal, believing there are few strategic benefits. Also, Ian Molson, a distant cousin of Molson chairman Eric Molson, is trying to prepare a counterbid for Canada's oldest beer company. However, analyst Michael Van Aelst of CIBC World Markets said this week he is doubtful a third-party takeover could succeed, because Molson is not profitable enough to justify a higher offer.

In a related development, the company also modified another contentious clause, and will not pay chief executive Dan O'Neill a $2.4 million payment after a change of control at the brewer. Instead, if O'Neill leaves the new combined company within two years of the merger, he will be entitled to his change of control payment in lieu of severance.

Besides the Caisse, Molson said the Ontario Teachers Pension Plan as well as Coors have also agreed to the changes to the option holder voting and executive compensation plan. O'Neill is slated to become vice chairman of the combined firm, which would be the third-largest brewer in North America with annual sales of about $6 billion.

Molson shares fell 40 Canadian cents (32 cents) to close at 31.60 Canadian dollars ($25.15) in Toronto trading, while Coors shares rose 19 cents to close at $66.19 on the New York Stock Exchange.


15 October, 2004