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CANADA NEWS Updated November 7, 2012, 3:38 p.m. ET

Molson Coors Profit Flat; Sales Rose on Acquisition

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By JOH N KEL L

Molson Co.'s third-quarter profit inched up 0.5% as the brewer's volume

soared thanks to the acquisition of a European brewer, though expenses also jumped.

Sales in Canada, meanwhile, have fallen because of the National Hockey League

lockout.

The maker of brands such as Molson

Canadian, Coors Light and Carling

reported sharply higher sales. Results

were bolstered by the first full quarter of

the company's $3.4 billion acquisition of

Central and East European brewer

StarBev, which offset weakness in other

markets. Profit jumped in the domestic

market but slid in the U.K., Canada and

international segments.

Chief Executive and President Peter

Swinburn said there was lower demand

across the brewer's businesses during

the quarter and hinted at problems

facing the company in the current quarter.

"We expect the fourth quarter to be the most challenging of this year, with difficult

profit comparisons in Canada and the U.K. and higher costs in the U.S. and Central

Europe," Mr. Swinburn said.

Mr. Swinburn told analysts during a conference call that for the first four weeks of the

current quarter, sales to retailers dropped into the low double-digits in the U.K. due to

a challenging prior-year comparison and in the high single-digits in Canada as overall

volumes with the hockey dispute.

The company's domestic performance has fared better, as beer sales were flat over

the same four-week period.

Global brewers, including Heineken NV and SABMiller PLC, posted mixed results in

the latest quarter as stronger demand in North America has been offset by weakness

in Western Europe.

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Molson has pushed into China and other emerging markets for growth, and in June

completed its acquisition StarBev, getting an even greater foothold abroad. The deal

gives Molson access to a region where the beer market is expanding as the middle

class gets bigger, though investors have fretted about transaction costs and

integration worries.

In the latest quarter, pro forma underlying earnings rose nearly 16% in Central Europe.

Sales volume, however, dropped 1.5% due to lower demand, particularly in

September.

Overall, Molson reported a profit of $198.4 million, or $1.09 a share, up from $197.4

million, or $1.06 a share, a year earlier. Excluding acquisition-related costs and other

impacts, earnings rose to $1.37 from $1.14.

Net sales after excise taxes increased 25% to $1.2 billion.

Gross margin widened ever-so-slightly to 42.5% from 42.3%, though cost of goods

sold rose 25%.

World-wide beer volume was up 31% to 17.2 million hectoliters.

Molson reported the U.K. unit's underlying pretax profit slumped 63% due to lower

volume, higher input costs and pension expenses. Canada's profit dropped 7.1% as

higher prices and cost cutting couldn't fully offset weaker volume. Both regions

reported lower sales to retailers.

Without games on Canadian TV screens, beer sales are getting dented. The

popularity of hockey generates a lot of beer drinking occasions in Canada—at bars, in

homes or at the venues.

Mr. Swinburn said in an interview there is no way Molson Coors can replicate the

marketing reach the NHL offers, even if it diverted all ad spending from hockey to

other outlets. So challenges in Canada appear likely to persist until the NHL and

players reach a deal.

Meanwhile, the MillerCoorsventure reported a profit of $306.9 million, up from $176.4

million a year earlier. Net sales after excise tax were up 1.5% to $1.99 billion.

Coors Light sales to retailers again grew in the low-single digits, while Miller Lite

dropped in the mid-single digits and posted a weaker performance than the first half of

the year. The company launched a new "It's Miller Time" campaign this year to bolster

the brand, and on Wednesday, said it will target more ads around the fall football

season.

At the craft and import division, a double-digit gain that outperformed the overall craft

segment was attributed to strong demand for Leinenkugel's Summer Shandy and

Blue Moon Belgian White. Craft brews are a portion of the beer business that have

seen rapid product development in recent years, as seasonal blends and other new

flavors appeal to more consumers.

MillerCoors is aiming to take greater advantage of the craft segment's domestic

outperformance by launching new Blue Moon and Leinenkugel's beers next year. Blue

Moon's new line extensions will be called Graffiti, Expressionist and Vintage, and the

brewer is hopeful about distribution potential based on the success of other Blue

Moon beers. A winter version of Leinenkugel's, coming off the success of Summer

Shandy, is also planned.

—Ben Fox Rubin contributed to this article.

11/16/2015 Molson Coors CEO Doesn't Rule Out Buying MillerCoors if Available ­ WSJ

http://www.wsj.com/articles/molson­coors­ceo­doesnt­rule­out­buying­millercoors­if­available­1403817656 1/3

Mǿŀșǿň Čǿǿřș Břěẅįňģ Čǿ. Čħįěf Ěxěčųțįvě Pěțěř Șẅįňbųřň șǻįđ ħě ẅǿųŀđň'ț řųŀě ǿųț bųỳįňģ ȘǺBMįŀŀěř PĿČ'ș 58% șțǻķě įň țħěįř Ų.Ș. jǿįňț věňțųřě MįŀŀěřČǿǿřș įf įț běčǿměș

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BŲȘİŇĚȘȘ

Mǿŀșǿň Čǿǿřș ČĚǾ Đǿěșň'ť Řųŀě Ǿųť Bųỳįňģ MįŀŀěřČǿǿřș įf Ǻvǻįŀǻbŀě Pěțěř Șẅįňbųřň Řěįțěřǻțěđ Čǿmpǻňỳ'ș Fǿčųș ǿň Břįňģįňģ Đǿẅň Đěbț Ŀěvěŀș, İňčřěǻșįňģ Đįvįđěňđș

Peter Swinburn, CEO, said he is positioning Molson Coors to take advantage of opportunities. BLOOMBERG NEWS

Jųňě 26, 2014 5:20 p.m. ĚȚ

Bỳ MİĶĚ ĚȘȚĚŘĿ

11/16/2015 Molson Coors CEO Doesn't Rule Out Buying MillerCoors if Available ­ WSJ

http://www.wsj.com/articles/molson­coors­ceo­doesnt­rule­out­buying­millercoors­if­available­1403817656 2/3

ǻvǻįŀǻbŀě.

Șħǻřěș įň Mǿŀșǿň Čǿǿřș ħǻvě řįșěň įň řěčěňț ẅěěķș ǿň ģřǿẅįňģ șpěčųŀǻțįǿň țħǻț Ǻňħěųșěř-Bųșčħ İňBěv ŇV, țħě ẅǿřŀđ'ș ŀǻřģěșț břěẅěř, čǿųŀđ țřỳ țǿ ǻčqųįřě įňđųșțřỳ Ňǿ. 2 ȘǺBMįŀŀěř. Țħě čǿmbįňěđ břěẅěř ẅǿųŀđ ŀįķěŀỳ bě řěqųįřěđ țǿ đįvěșț MįŀŀěřČǿǿřș ǿň ǻňțįțřųșț ģřǿųňđș, ẅįțħ Mǿŀșǿň Čǿǿřș țħě ŀįķěŀįěșț bųỳěř.

Mř. Șẅįňbųřň đěčŀįňěđ țǿ țǻŀķ ǻbǿųț țħě ŀįķěŀįħǿǿđ ǿf șųčħ ǻ șčěňǻřįǿ ǿř ħįș čǿmpǻňỳ'ș ǻppěțįțě fǿř ǻ đěǻŀ įň ǻň įňțěřvįěẅ. Bųț ħě ǻŀșǿ ẅǿųŀđň'ț řųŀě ǿųț șųčħ ǻ đěǻŀ, ẅħįčħ čǿųŀđ țǿp $10 bįŀŀįǿň, đẅǻřfįňģ přěvįǿųș ǻčqųįșįțįǿňș ǻț Đěňvěř-bǻșěđ Mǿŀșǿň Čǿǿřș.

"Țħě įmpǿřțǻňț țħįňģ fǿř mě įș țǿ pųț țħě čǿmpǻňỳ įň pǿșįțįǿň țǿ țǻķě ǻđvǻňțǻģě ǿf ẅħǻțěvěř čǿměș ǿųř ẅǻỳ,'" șǻįđ Mř. Șẅįňbųřň, ẅħǿșě čǿmpǻňỳ břěẅș Čǿǿřș Ŀįģħț, Mǿŀșǿň Čǻňǻđįǻň ǻňđ Čǻřŀįňģ.

Běŀģįųm'ș ǺB İňBěv, ẅħǿșě břǻňđș įňčŀųđě Bųđẅěįșěř, Čǿřǿňǻ ǻňđ Șțěŀŀǻ Ǻřțǿįș, ħǻș đěčŀįňěđ țǿ čǿmměňț ǿň ẅħěțħěř įț ẅįŀŀ țřỳ țǿ ǻčqųįřě Ų.Ķ.-bǻșěđ řįvǻŀ ȘǺBMįŀŀěř, mǻķěř ǿf Mįŀŀěř Ŀįțě, Pěřǿňį ǻňđ Pįŀșňěř Ųřqųěŀŀ. ǺB İňBěv ħǻș ǻ ħįșțǿřỳ ǿf bįģ đěǻŀș, įňčŀųđįňģ ŀǻșț ỳěǻř'ș $20.1 bįŀŀįǿň țǻķěǿvěř ǿf Měxįčǻň břěẅěř Ģřųpǿ Mǿđěŀǿ ȘǺB đě ČV ǻňđ įțș $52 bįŀŀįǿň ǻčqųįșįțįǿň ǿf Ǻňħěųșěř-Bųșčħ įň 2008.

Mǿŀșǿň Čǿǿřș ħǻș ǻ 42% șțǻķě įň MįŀŀěřČǿǿřș, ẅħįčħ ħǻș ǻbǿųț ǻ 25% Ų.Ș. mǻřķěț șħǻřě, běħįňđ ǺB İňBěv, ẅħįčħ čǿňțřǿŀș ňěǻřŀỳ ħǻŀf țħě Ų.Ș. mǻřķěț. Mǿŀșǿň Čǿǿřș ħǻș țħě řįģħț țǿ įňčřěǻșě įțș MįŀŀěřČǿǿřș șțǻķě țǿ 50% įf ȘǺBMįŀŀěř įș ǻčqųįřěđ, pųțțįňģ įț įň țħě đřįvěř'ș șěǻț țǿ ǻčqųįřě țħě řěmǻįňįňģ 50%. Mǿŀșǿň Čǿǿřș ẅǻș țħě ẅǿřŀđ'ș șěvěňțħ- ŀǻřģěșț břěẅěř bỳ vǿŀųmě ŀǻșț ỳěǻř, ǻččǿřđįňģ țǿ Ěųřǿmǿňįțǿř İňțěřňǻțįǿňǻŀ.

Șțįfěŀ Ňįčǿŀǻųș ǻňǻŀỳșț Mǻřķ Șẅǻřțżběřģ ǿň Țħųřșđǻỳ řǻįșěđ ħįș șħǻřě přįčě țǻřģěț ǿň Mǿŀșǿň Čǿǿřș țǿ $87 fřǿm $76, ěșțįmǻțįňģ ǻ 50% ŀįķěŀįħǿǿđ ǺB İňBěv ẅįŀŀ țřỳ țǿ bųỳ ȘǺBMįŀŀěř ǿvěř țħě ňěxț ỳěǻř, ǻŀŀǿẅįňģ Mǿŀșǿň Čǿǿřș țǿ ǻčqųįřě Mįŀŀěř Čǿǿřș. Ěǻřŀįěř țħįș mǿňțħ Mǿřģǻň Șțǻňŀěỳ řǻįșěđ Mǿŀșǿň Čǿǿřș țǿ "ěqųǻŀ ẅěįģħț'' ǻňđ Bǻňķ ǿf Ǻměřįčǻ Měřřįŀŀ Ŀỳňčħ řǻįșěđ țħě șțǿčķ țǿ "bųỳ," ẅįțħ bǿțħ ǻŀșǿ čįțįňģ țħě pǿșșįbįŀįțỳ ǿf MįŀŀěřČǿǿřș ŀǻňđįňģ įň țħě čǿmpǻňỳ'ș ŀǻp.

Șħǻřěș ǿf Mǿŀșǿň Čǿǿřș ěňđěđ 0.5% ħįģħěř Țħųřșđǻỳ ǻț $74.21 ǿň țħě Ňěẅ Ỳǿřķ Șțǿčķ Ěxčħǻňģě. Țħě șħǻřěș ħǻvě řįșěň 32% șǿ fǻř țħįș ỳěǻř, ħǻňđįŀỳ ǿųțpǻčįňģ ǺB İňBěv ǻňđ ȘǺBMįŀŀěř, ẅħįčħ ħǻvě ǻŀșǿ įňčřěǻșěđ.

İňvěșțǿřș ǻŀșǿ ħǻvě fŀǿčķěđ țǿ Mǿŀșǿň Čǿǿřș ǻfțěř țħě čǿmpǻňỳ pǿșțěđ ħįģħěř-țħǻň- ěxpěčțěđ přǿfįț įň țħě fįřșț qųǻřțěř, ħěŀpěđ bỳ čǿșț-čųțțįňģ ǻňđ řěbǿųňđįňģ Ěųřǿpěǻň

11/16/2015 Molson Coors CEO Doesn't Rule Out Buying MillerCoors if Available ­ WSJ

http://www.wsj.com/articles/molson­coors­ceo­doesnt­rule­out­buying­millercoors­if­available­1403817656 3/3

șǻŀěș. Țħǻț'ș ħěŀpěđ țħě břěẅěř pǻřě đěbț ǻfțěř įț șpěňț $3.5 bįŀŀįǿň įň 2012 țǿ ǻčqųįřě Čěňțřǻŀ ǻňđ Ěǻșț Ěųřǿpěǻň břěẅěř ȘțǻřBěv ĿP. İț ǻŀșǿ mǻķěș įț ěǻșįěř fǿř Mǿŀșǿň Čǿǿřș țǿ mǻķě ǻčqųįșįțįǿňș ǻģǻįň įf ǿppǿřțųňįțįěș ǻřįșě.

Mř. Șẅįňbųřň řěįțěřǻțěđ Țħųřșđǻỳ țħǻț Mǿŀșǿň Čǿǿřș řěmǻįňș fǿčųșěđ ǿň břįňģįňģ đěbț ŀěvěŀș fǻřțħěř đǿẅň ǻňđ pŀǻňș țǿ čǿňțįňųě įňčřěǻșįňģ đįvįđěňđș fǿř șħǻřěħǿŀđěřș, ẅħįŀě ňǿț řųŀįňģ ǿųț șțǿčķ bųỳbǻčķș ǿř ǻčqųįșįțįǿňș.

Ħě ǻđđěđ țħě čǿmpǻňỳ đǿěșň'ț fěěŀ přěșșųřě țǿ ģěț bįģģěř țħřǿųģħ ǻčqųįșįțįǿňș țǿ șųřvįvě įň țħě řǻpįđŀỳ čǿňșǿŀįđǻțįňģ běěř įňđųșțřỳ, ẅħěřě țħě ẅǿřŀđ'ș fǿųř ŀǻřģěșț břěẅěřș bǿǻșț ǻ čǿmbįňěđ mǻřķěț șħǻřě ǿf ǻřǿųňđ 50%. Mǿŀșǿň Čǿǿřș įș ǻ mǻjǿř pŀǻỳěř įň țħě Ų.Ș., Čǻňǻđǻ ǻňđ Ěųřǿpě bųț ħǻș ǻ mįňįmǻŀ přěșěňčě ěŀșěẅħěřě.

``Ẅě'řě ħǻppỳ ẅįțħ ǿųř șįżě,'' șǻįđ Mř. Șẅįňbųřň, ǻđđįňģ țħǻț įț įș mǿřě įmpǿřțǻňț fǿř Mǿŀșǿň Čǿǿřș țǿ bě țħě Ňǿ. 1 ǿř Ňǿ. 2 břěẅěř įň țħě mǻřķěțș ẅħěřě įț įș přěșěňț.

Țħě čřěđįț řǻțįňģ ǻģěňčỳ Șțǻňđǻřđ & Pǿǿř'ș șǻįđ ŀǻșț mǿňțħ įț čǿųŀđ řǻįșě įțș ``BBB" đěbț řǻțįňģ fǿř Mǿŀșǿň Čǿǿřș ǻfțěř țħě břěẅěř čųț įțș đěbț bỳ $1.4 bįŀŀįǿň șįňčě ěǻřŀỳ 2013. Ģǻvįň Ħǻțțěřșŀěỳ, Mǿŀșǿň Čǿǿřș' čħįěf fįňǻňčįǻŀ ǿffįčěř, țǿŀđ įňvěșțǿřș ǻț ǻ čǿňfěřěňčě Ẅěđňěșđǻỳ țħǻț țħě břěẅěř ẅǻňțș țǿ mǻįňțǻįň įțș įňvěșțměňț-ģřǻđě řǻțįňģ bųț țħǻț įț įș "ňǿț ǻ ŀįňě įň țħě șǻňđ.''

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4/4/2016 Coors, Miller Team Up To Battle Bud ­ CBS News

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Coors, Miller Team Up To Battle Bud

The makers of Coors and Miller plan to combine their U.S. brewing operations in an effort to compete better against industry­leader Anheuser­Busch. 

The joint venture announced Tuesday will be known as MillerCoors and will have responsibility for selling brands like Miller Lite and Coors Light in the U.S. 

Anheuser­Busch Cos. accounts for about half of the U.S. market with brands such as Budweiser and Bud Light. 

SABMiller PLC will have a 58 percent economic interest in the venture and MolsonCoors Brewing Co. will own 42 percent of the new company. They will have equal voting interests, however. 

Precise financial terms of the deal were not disclosed. 

The joint venture will also result in cost savings of $500 million, the companies said. That savings will mainly come from reducing shipping distances, finding economies of scale in brewing operations, optimizing production and eliminating duplicate corporate and marketing services. 

London­based SABMiller, which brews Miller Lite as well as a slew of European beers, and Denver­based Molson Coors, the brewer of Coors Light and the craft beer Blue Moon, will each have five representatives on its board of directors. 

Pete Coors, vice chairman of Molson Coors, will serve as chairman of the new

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company and Molson Coors Chief Executive Leo Kiely will be the new CEO of the joint venture. Tom Long, CEO of Miller, will be appointed president and chief commercial officer. 

Under the terms of the agreement, the companies said they will conduct all of their U.S. business exclusively through the venture. 

The companies project MillerCoors will have combined annual beer sales of 69 million U.S. barrels with revenue of about $6.6 billion. 

Coors said the joint venture will allow both companies to compete for U.S. consumers who are "looking for greater choice and differentiation," as wine and spirits continue to entice beer drinkers and imports and craft beers garner a larger share of the market. 

The companies said by combining their U.S. operations, the venture will be able to invest more in marketing its brands to consumers and compete more effectively with larger brewers like Anheuser­Busch and InBev NV S.A., which imports a large number of global beers into the U.S. and is the world's largest brewer by volume. 

"Given the highly complementary nature of our U.S. assets, operations and geographic footprint, this is a logical and compelling combination that we expect will create significant value for shareholders while benefiting distributors, consumers, retailers and the market overall," said SABMiller Chief Executive Graham Mackay. 

SABMiller shares rose 2.3 percent to 1,499 pence ($30.57) in midday trading in London. 

The companies said the deal will add to both of their earnings in the second full year of combined operations. 

The companies said $50 million of the total cost savings will be recorded in the first full financial year after the two companies combine. Another $350 million will be saved in the second year and the last $100 million will come in year three. 

The companies added they will have to make a one­time cash outlay of $450 million to achieve those savings. 

Final approval of the deal is expected by the end of 2007, the companies said.  © 2007 CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.

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4/4/2016 Q&A on the Miller­Coors merger

http://www.printthis.clickability.com/pt/cpt?expire=&title=Q%26A+on+the+Miller­Coors+merger&urlID=32095880&action=cpt&partnerID=394139&cid=3143409... 1/3

 

 

MILWAUKEE NEWS

Q&A on the Miller-Coors merger By Tom Daykin of the Journal Sentinel

Oct. 10, 2007

Q. Who's buying whom?

A. SABMiller Plc, a global brewer based in London, and Molson Coors Brewing Co., with headquarters in Denver and Montreal, have signed a letter of intent to combine their U.S. operations, Miller Brewing Co. and Coors Brewing Co. Neither company is buying the other. Instead, a joint venture ­ called MillerCoors ­ is being created.

Q. Why?

A. Executives at SABMiller and Molson Coors say the new company will be a stronger competitor with Anheuser­Busch Cos., the dominant U.S. brewer, and other makers of alcohol drinks. Anheuser­Busch has a 48% market share and has long been the nation's dominant brewer. Together, Miller and Coors will have a 29% market share. The companies expect to save $500 million a year by combining their operations.

Q. Who will own the new company, and who will run it?

A. SABMiller and Molson Coors will each have a 50% interest in the joint venture. Leo Kiely, 60, chief executive officer of Molson

4/4/2016 Q&A on the Miller­Coors merger

http://www.printthis.clickability.com/pt/cpt?expire=&title=Q%26A+on+the+Miller­Coors+merger&urlID=32095880&action=cpt&partnerID=394139&cid=3143409... 2/3

Coors, will be the CEO of MillerCoors. Tom Long, 48, president and chief executive of Miller Brewing, will be MillerCoors president and chief commercial officer.

Q. Is the deal final?

A. No. The two companies first have to reach a definitive agreement, which is expected by the end of the year. They also need approval from federal antitrust regulators. The entire transaction should be final by mid­2008.

Q. Will the Miller brewery in Milwaukee be closing?

A. No. None of Miller's six breweries, or the two breweries operated by Coors, will close. But administrative jobs from both companies may be targeted for cuts.

Q.Where will the joint venture's headquarters be?

A. That has yet to be decided. Executives from both companies will be sorting out what jobs can be best managed in either Golden, Colo., where Coors is based, or Milwaukee, and the potential for centralizing work in either city.

Q. How will beer prices be affected?

A. In the short term, not at all. But Kiely and other executives say combining the operations of Miller and Coors will save $500 million a year. That will help maintain more competitive prices and will give MillerCoors more cash to invest in new products and other innovations.

Q. Is Coors liable to be more widely available in this market now?

A. Coors Light is already widely available, including in this

4/4/2016 Q&A on the Miller­Coors merger

http://www.printthis.clickability.com/pt/cpt?expire=&title=Q%26A+on+the+Miller­Coors+merger&urlID=32095880&action=cpt&partnerID=394139&cid=3143409... 3/3

market. It's the nation's fourth­largest brand, after Bud Light, Budweiser and Miller Lite.

Q. How will this affect the availability of Miller Lite or any other Miller brands?

A. Miller Lite also is already widely available. Brands that will likely have greater distribution through the combined company are the imports and craft beers that aren't circulated as widely as Miller Lite, Coors Light and other mainstream brands. These could include Pilsner Urquell, Peroni, Blue Moon and Leinenkugel's Sunset Wheat.

Q. Will the names of Miller Park and Coors Field, in Denver, be changed to reflect the new company's name?

A. No. Despite the new company's name, the Miller and Coors names will continue to have value as separate brand names. So there's no point in changing the names of the baseball parks for the Milwaukee Brewers and Colorado Rockies.

About Tom Daykin Tom Daykin covers commercial real estate and development.

@tomdaykin tdaykin@journalsentine... 414-224-2131

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