North American beer giants plan merger

Coors is planning to merge with Canadian rival Molson to challenge the world’s beermaking giants.

Coors said it was joining Molson to create a group with annual revenues of about €4.88bn.

The combined company would rank fifth in the world by brewing volume, the companies said in a statement.

Chief executive of Coors, Leo Kiely would become chief executive and Molson chairman Eric Molson would become chairman.

The deal would merge two family-led breweries both founded more than a century ago. Golden-based Coors trails Anheuser-Busch and SABMiller in the US brewing business, while Montreal-based Molson is neck-and-neck with Labatt Brewing in Canada.

Analysts have been sceptical of the plan, saying they were uncertain how it would benefit the companies or save money.

The US market is flat and companies have begun working together to tap emerging markets overseas, particularly in China and South America.

But Coors and Molson said today that the combination should generate about €142m a year by 2007 in cost savings and new revenues.