Molson Coors Brewing Co. could find itself pushed to merge with a larger rival if a union between Anheuser-Busch Cos. Inc. and InBev comes to fruition as a growing number of analysts are expecting.
“If it were to happen, it would make Molson Coors look a little smaller,” said Eric Shepard, executive editor of Beer Marketer’s Insights. “It would probably add pressure for them to seek another partner.”
Speculation about a possible merger between Molson Coors and SABMiller flared last month when Norman Adami, president of SABMiller’s Americas division, said he saw cost efficiencies in a “potential tie-up” between the two brewers.
But analysts have been more focused on the question of whether the world’s two largest brewers by production, No. 1 InBev and No. 2 Anheuser-Busch, will merge.
Citigroup beverage analyst Bonnie Herzog places the odds of such a mega-combination over the next few years at 70 percent.
“They have no other choice, quite frankly, in my view,” Herzog told investors on a conference call Monday.
She estimates a merger would save the companies $10 billion in costs. Citigroup has upgraded the rating on Anheuser-Busch, brewer of Budweiser products, from “hold” to “buy” in anticipation of a combination.
Anheuser-Busch also brews InBev’s Bass, Beck’s and Stella Artois brands in the U.S. and in May purchased its Rolling Rock brand for $82 million.
New chief executive August Busch IV has emphasized his desire to have the St. Louis company reclaim its former title as the world’s largest brewer.
A Molson Coors spokesman did not return calls to comment on speculation of a merger with SABMiller.
Even if SABMiller and Molson Coors combined forces, they would remain significantly smaller than a combined Anheuser Busch-InBev.
Molson Coors carries a market value of $8.2 billion and SABMiller is valued at $40.2 billion, according to Bloomberg.
Anheuser-Busch is valued at more than $37 billion and InBev at $52 billion.
Anheuser-Busch shares have been flat this year because of the company’s reliance on more sluggish U.S. markets.
Molson Coors shares are up 18.6 percent this year, and SABMiller shares are up 12 percent. InBev shares are 24.4 percent higher.
Anheuser-Busch shares, by comparison, are up only 1 percent.
Staff writer Aldo Svaldi can be reached at 303-954-1410 or asvaldi@denverpost.com.
BY THE NUMBERS
$40.2 BILLION
SABMiller’s market value
12 percent
Increase this year in SABMiller shares
$8.2 BILLION
Molson Coors’ market value
18.6 percent
Increase this year in Molson Coors shares
