With a $12 billion deal set to close this year, Molson Coors (TAP) CEO Mark Hunter told Real Money on Friday that the brewing giant is in a prime position to stay ahead of the booming market for craft beers.
"We started as a craft company ourselves," Hunter said, noting Molson Coors got its start in 1786 through its Molson business in Canada, and in 1873 with Adolf Coors' operations in Colorado.
"Over the last couple of centuries we went from small-craft player to just a more popular international business," he said. "Brands like Blue Moon, which has grown for 81 quarters in a row, shows that we have an ability to set the agenda and compete in what's become a very intensely competitive craft segment."
Hunter added that "craft's good for beer," especially because consumers are refocused on a beer's provenance, style and flavor.
The Denver-based brewer, whose shares are up 11% so far on the year (making it one of the top performers in Real Money's "Vice Squad" watch list ), is on track to complete a $12 billion acquisition this year of the remaining stake of Chicago-based MillerCoors. A joint venture between Molson Coors and London's SABMiller currently holds MillerCoors, but Molson is set to obtain the 58% remaining stake it doesn't hold in the second half of this year, subject to regulatory approval.
"When we close the transaction we are currently working on to acquire all of MillerCoors, our beers will be available in over 70 countries internationally," Hunter said, adding that the Coors trademark "is absolutely on fire," especially in Latin America.
Hunter says he's confident the deal will close in the second half, and that "regulatory approvals are coming towards us pretty quickly," although there are still two or three approvals pending.
"We'll be ready to go on day one," Hunter said, adding that Molson Coors' business will roughly double in size will MillerCoors, placing the company as the world's third-largest brewer by sales.
Real Money's Vice Squad Watch List
- Diageo (DEO)
- Molson Coors (TAP)
- Constellation Brands (STZ)
- Reynolds (RAI)
- Altria Group (MO)
- Philip Morris (PM)
- Vista Outdoors (VSTO)
- Smith & Wesson (SWHC)
- Sturm Ruger (RGR)
- WYNN Resorts (WYNN)
- Churchill Downs (CHDN)
- Las Vegas Sands (LVS)