SABMiller plc (SABMiller) and Molson Coors Brewing Company have agreed to combine the U.S. and Puerto Rican operations of their respective subsidiaries, Miller and Coors, in a joint venture, to be called MillerCoors, to create a stronger, brand-led U.S. brewer. MillerCoors will have annual pro forma net revenues of approximately $6.6 billion. SABMiller and Molson Coors will each have a 50% voting interest in the joint venture and SABMiller will have a 58% economic interest.
SABMiller was advised by Lovells' London office and Cleary Gottlieb Steen & Hamilton LLC in New York as co-counsel on corporate aspects of the transaction and by Jones Day (Washington D.C.) on U.S. anti-trust matters.
The joint venture will be effected through the contribution by both parties of their U.S. and Puerto Rico operations into a limited liability company to be formed under Delaware law. Each of the parties has agreed that all its U.S. business will be conducted exclusively through the joint venture. The transaction is subject to finalisation of definitive agreements, which is expected by the end of 2007. Closing of the transaction is also subject to obtaining clearances from U.S. competition authorities and certain other regulatory clearances and third-party consents as required.
The transaction will require the approval of a majority of Molson Coors' Class A common and exchangeable shareholders, which is expected to be given at the time of signing the definitive agreements by the Molson and Coors families, which own a majority of that class of shares. The transaction does not otherwise require approval by the shareholders of either party.
The Lovells team was led by London-based client relationship partner Andrew Pearson, working closely with SABMiller General Counsel and Group Secretary, John Davidson and Deputy General Counsel, Stephen Jones.
Andrew Pearson, speaking for the Lovells team, said::
“We are delighted to announce our involvement in this challenging and complex transaction which is of great strategic importance to SABMiller in the execution of its U.S. strategy. It has been a pleasure to work with the SABMiller team on yet another landmark deal."
SABMiller plc and Lovells
Lovells has acted for SABMiller since 1998 on a series of international corporate and capital markets transactions commencing with SABMiller's £3.4 billion listing on the London Stock Exchange in March 1999; a US$612 million synthetic treasury stock structure implemented in September 1999; a US$600 million convertible bond issue in August 2001; a $420 million equity placing in December 2001; and the US$5.62 billion acquisition of Miller Brewing Company from Altria Group (formerly Philip Morris Companies, Inc), which completed in July 2002, and a subsequent US$1 billion equity placing, which was pulled because of adverse global securities market conditions.
In 2003, Lovells' London, Milan and Rome offices advised on SABMiller's acquisition of Birra Peroni S.p.A., with an enterprise value of some US$683 million. That year, Lovells also advised on SABMiller's US$2 billion debut issue of London listed, investment grade, corporate bonds. In 2005, Lovells advised on SABMiller's US$7.8 billion transaction with Bavaria S.A. in Colombia. In June 2006, the firm advised SABMiller on three deals announced within the space of a week, including a $1.75bn Rule 144A bond issue, the $55.3m disposal of Bavaria S.A.'s fruit juice business in Colombia, and the $215m acquisition of the Sparks and Steel Reserve brands and related trademarks in the United States.
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