Molson Coors to Acquire Full Ownership of MillerCoors Joint Venture and Global Miller Brand Portfolio for $12 Billion

The transaction will be financed through a combination of cash on hand and proceeds from issuances of new debt and equity. Molson Coors has received committed debt financing from Citigroup Global Markets, Bank of America Merrill Lynch and UBS Investment Bank.

Mark Hunter, president and chief executive officer of Molson Coors stated, “This transaction is a game-changing opportunity for Molson Coors and advances our ambition to be the first choice for consumers and customers. MillerCoors is a business we know very well – its strategy, culture, brands and people – and we look forward to meeting and exceeding the needs of our valued distributor partners and consumers across the U.S. In consolidating ownership of MillerCoors, we will strengthen our presence in the highly attractive U.S. beer market, further improve our global scale and agility, benefit from significantly enhanced cash flows, and capture substantial operational synergies. Furthermore, the acquisition of the Miller brand rights globally will help accelerate Molson Coors’ growth strategy by strengthening our international beer portfolio with a powerful and authentic American brand, as well as expand our presence in high-growth markets.

“In short, we will be a more competitive global company, better positioned to invest behind our core brands, expand our above premium portfolio, strengthen our commercial execution capabilities and deliver long term shareholder value.”

Carlos Brito, Chief Executive Officer of Anheuser-Busch InBev, said, “Our combination with SABMiller is about creating the first truly global beer company and bringing more choices to beer drinkers in markets outside of the U.S. We are pleased to have reached this agreement with Molson Coors to divest SABMiller’s U.S. assets. We will continue to proactively address any regulatory concerns regarding our combination with SABMiller in other relevant markets.”

Molson Coors expects the transaction to add approximately $4.7 billion in incremental revenue and more than $1.0 billion in incremental EBITDA on a pro forma basis. The acquisition is expected to be more than 25% accretive to Molson Coors’ cash earnings in the first full year of operations before the benefit of synergies. Because this is an asset transaction for U.S. tax purposes, it is accompanied by immediate, substantial cash tax benefits that the Company estimates will exceed $250 million annually for the first 15 years after completion. The Company estimates a $2.4 billion net present value of these expected tax benefits. The Company also expects to realize annualized cost synergies of at least $200 million by the fourth full year following the transaction, primarily from procurement improvements, supply network optimization and operational efficiencies. Following the close, Molson Coors would have 2014 pro forma combined worldwide volume of approximately 106 million HL, revenues of $12.2 billion and EBITDA of $2.5 billion.

Gavin Hattersley, CEO of MillerCoors and CFO of Molson Coors, stated, “This is a strategic, well-timed opportunity to acquire these businesses at an attractive price. Fully integrating MillerCoors into Molson Coors, given our cost-saving capability and our cash-generating strength, will allow Molson Coors to aggressively pay down debt while investing more behind our brands and simultaneously maintaining our strong dividend policy. As CEO of MillerCoors, I am very excited about the firepower we can use to support our brands and restore growth in the U.S. business.”

Geoff Molson, chairman of Molson Coors’ Board of Directors, said: “Acquiring the balance of MillerCoors is truly a great opportunity for us, and we are thrilled to be able to capitalize on it. It will allow us to create a more nimble North American brewer with an expanded portfolio of iconic brands and an even stronger foundation from which to grow internationally.”

Pete Coors, vice chairman of Molson Coors and chairman of the MillerCoors Board of Directors, said, “While the partnership with SABMiller has been very successful, the consolidation of MillerCoors’ ownership is a tremendous outcome for this business, its employees and its distributor network. Upon close, we expect a seamless transition and will continue to provide our distributors and consumers the excellence that comes with an unparalleled passion for brewing great beers.”

In addition to the successful completion of AB InBev’s acquisition of SABMiller, the transaction is also subject to the receipt of customary regulatory approvals.

Molson Coors is being advised by Kirkland & Ellis LLP, Cleary Gottlieb and UBS Investment Bank.