Analysis - Molson Coors shareholders banking on Anheuser-Busch InBev, SABMiller mega-merger
Molson Coors' share price has soared in 2014
A few client notes following Molson Coors' annual investor day earlier this week highlight the schism between analysts on the so-called 'mega-merger' that many observers have become obsessed with. In the 'yes' camp, there's Stifel, which sees no other option: "As we study 'obstacles' to a deal, our increasing difficulty is seeing why A-B InBev would choose NOT to buy SABMiller," todays note reads. "More and more, we see these impediments as complexity, not deal breakers."
Over at Nomura, however, the merger appears less likely to proceed. "We continue to be sceptical about the A-B InBev/SABMiller deal," the analyst says.
The link between Molson Coors and 'mega-merger' is MillerCoors, the US JV in which the North American brewer has a 42% stake. As speculation continues to suggest that an A-B InBev move for SABMiller is as inevitable as night following day, Molson Coors' share price has leapt: Witness a 31.5% rise from the start of this year to US$73.86 per share yesterday.
Shareholders clearly believe that Molson Coors is well-placed to benefit from a 'mega-merger', probably in the form of a buy-out of SABMiller's 58% holding in MillerCoors.
"We take our target price to $87 from $76, assigning a ... 50% probability (was 30%) to a 100% ownership of MillerCoors scenario," says Stifel.
Nomura, however, "sees other potential solutions for the MillerCoors stake. We (also) see some risk that the shares could give back recent gains."
Which side are you on?
Heineken has launched its first above-the-line marketing campaign in the UK for Symonds Founder's Reserve Cider, as part of a GBP2m (US$3.15m) push for the brand. ...
- Chile's winemakers caught out by Brexit "disease"
- What's coming up in beer in 2017? - Comment
- Interview - Pernod Ricard's luxury director
- The just-drinks Analyst - 2017 forecasts
- What's coming up in wine in 2017? - Comment
- Suntory sends staff to fat camp - report
- Diageo Australia names new commercial head
- Pernod Ricard's Absolut Lime - NPD
- Former Stoli Group CEO joins Perfect Vodka owner
- "Beer and weed are complements" - analyst
- Global vodka insights - market forecasts, product innovation and consumer trends
- The Next Seven Big Beverage Markets
- Global Cognac insights - market forecasts, product innovation and consumer trends
- Global gin insights - market forecasts, product innovation and consumer trends
- Darker Than Before: Global Prospects for Brown Spirits