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US: Coors and Molson CEOs up ante on merger

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The chief executives of Coors and Molson are on a mission to convince Molson investors to support their proposed merger. The drive follows admissions that their efforts so far may not have secured the move.

In an interview, Leo Kiely, chief executive of Adolph Coors Co., said: ""We have got some selling to do to have [Molson investors] understand and to put in perspective what our investors already understand. We have two months of really aggressive education to do."

A series of meetings have been planned with fund managers who control millions of Molson Class A shares, Kiely said. "Your odds of a strategic purchaser coming in and giving an upside to shareholders is very low," Kiely said, noting that any rival bidder would either lose the lucrative joint venture deal between the two firms to sell the Coors Light brand in Canada, or at best, make C$50m less per year than Molson does.

"We have been sort of cast in a bluffing situation but the fact is we can take control of our brand," Kiely warned.

In a recent road show, the CEOs emphasised the negative consequences of not merging, including Molson's chief executive Dan O'Neill warning that Molson stock would dive if the deal failed.

In an interview earlier this week, O'Neill said that he did not know whether class A non-voting shareholders will approve the deal. The merger, which would create the world's fifth-largest brewer by volume, requires the approval of both Molson's class A non-voting and class B voting shareholders.

With Molson's chairman, Eric Molson, controlling more than 50% of the class B voting shares, the fate of the merger seems to be up to the non-voting shareholders.


Sectors: Beer & cider

Companies: Molson Coors

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