• Financial Times, Tuesday, October 9, 2007 12:45 PM

SABMiller and Molson Coors are creating a joint venture company in the U.S. and Puerto Rico to be known as MillerCoors. It is designed to create cost savings in the U.S., where SAB is the second-biggest brewer and Molson the third. Anheuser-Busch dominates the market with a 50% share.

SAB and Molson say the deal will allow it to "compete more effectively in the U.S. against large-scale brewers, both domestic and global, craft brewers, and wine and spirits producers." The tie-up with Molson will also allow SAB to continue its expansion into emerging markets. It comes less than two years after SAB expanded in Latin America with the $7.8 billion acquisition of Bavaria, Colombia's biggest brewer.

SABMiller and Molson Coors will each have a 50% voting interest in the venture and have five representatives each on its boards. Pete Coors, vice chairman of Molson Coors, will chair the joint venture, with Graham Mackay, SABMiller CEO, as vice-chairman. Leo Kiely, CEO of Molson Coors, will take up the same role at Miller Coors.

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