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UK: Shares of British brewer SABMiller fell 0.2 % on Thursday, September 16 after continued reports that the brewer, the world's largest, is mulling an offer for Canada's Molson. The reports were first published in the Toronto Globe and Mail on Tuesday.

According to the reports, SABMiller is believed to be reviewing the potential for an offer, but is awaiting more details on a Coors and Molson contract, which could discourage any deal. SABMiller has been in touch with a dissident member of the family that controls Molson, the Financial Times reported on Thursday. The dissident holder, Ian Molson, is in an alliance with Toronto-based Onex, the report said.

A formal bid from SABMiller, in an alliance of SABMiller and could further threaten Molson's proposed merger with U.S. brewer Adolph Coors. SABMiller officials in London declined to comment on the reports.

The Coors merger proposal announced in July by Molson management, including Chairman Eric Molson, has drawn criticism from Molson shareholders and rumors the deal may collapse, according to media reports. The proposal would create a $6 billion company that would be the world's fifth-largest brewer.

Ian Molson is Eric Molson's cousin and a former company deputy chairman who in July wrote to the board and expressed an interest in making a bid that could reach $4 billion, the Wall Street Journal reported on Thursday. Ian Molson resigned from the board in protest of Eric Molson's management, the Journal said.

The contract with Coors sets that Molson brews and distributes Coors Light beer in Canada. Coors could force Molson to continue brewing Coors Light for another 10 years without sharing any of the profits with Molson or its new owner, the Journal said, citing unnamed industry executives.

Buying into Molson would allow London-based SABMiller to continue its North American expansion and escalate its market battle with St. Louis-based Anheuser-Busch, (BUD: news, chart, profile), the world's second-largest brewer, the Journal said. SABMiller entered the market in 1992 with its purchase of Miller Brewing.

Shares of Coors closed ahead of the news Wednesday down a penny, or 0.01 percent, at $68.37. Anheuser-Busch closed at $51.09, up 34 cents or 0.67 percent. SABMiller shares were last down 1.50 pence at 699.50p in London.


18 September, 2004