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SABMiller, the FTSE 100 brewing company, is to combine its US beer business with its closest rival, Molson Coors, to create an industry giant able to take on the mighty Budweiser.
As Anheuser-Busch, the company behind Bud, continues to dominate the US market, SABMiller said it hoped its new joint venture would be able to brew and ship its Miller and Coors beers more cheaply. The combined group will produce 69 million barrels of beer a year, and the merger should free up US$500 million ($655 million) a year in cost savings, executives believe.
SABMiller's US business - primarily the Miller portfolio acquired by the old South African Breweries in 2002 - has struggled since a price war launched by Anheuser-Busch. The joint venture, MillerCoors, which has annual sales of US$6.6 billion, will be 50-50 controlled by each company.
- Independent
