MONTREAL (AP) — A member of the Canadian founding family of Molson Coors Brewing Co. wants to see the company become a top global beer producer but won't say if it is interested in making a bid for Australia's Foster's.
"Our appetite as Molson Coors Brewing Co. is to be one of the best and biggest brewing companies in the world and we're always looking for opportunities to grow," Geoff Molson told reporters Wednesday after speaking to the Montreal Chamber of Commerce.
"(But) I'm not going to comment on what Molson Coors' plans are for this," said the 39-year-old beer company board member, who resigned as vice president of marketing to become chairman of the Montreal Canadiens hockey club.
With its five percent stake in Foster's Group Ltd., Molson Coors is seen as a possible bidder for the company, which announced Tuesday that it will split its beer and wine divisions.
Foster's move to create stand-alone companies is expected to attract the interest of large global brewers with one analyst saying they would have to pony up about $11 billion for the beer business. Foster's controls about half of Australia's beer market.
Among possible bidders are Diageo, Schweppes, SABMiller's joint venture with Coca-Cola Amatil, along with Suntory Holdings Ltd. and Sapporo Holdings Ltd. of Japan.
Morningstar analyst Phil Gorham said Foster's would be a good fit for Molson Coors.
"My feeling is they would be interested. It's the kind of market that they know ... but I just wonder if they have the capital to get a deal done right now," he said in an interview.
He said Molson Coors may instead have to partner with private equity or another global brewer.
"At this moment in time it may have come a bit too soon for Molson Coors to do it themselves," Gorham said, adding that the company remains heavily indebted from the 2005 merger between the two family-run North American brewers.
Theo Maas, an analyst at Arnhem Investment Management, told the Australian media that he expected SABMiller's Australian joint venture with Coca-Cola Amatil to emerge as front-runner for the beer unit.
SABMiller also formed a joint venture with Molson Coors to market their products in the United States under MillerCoors.
Meanwhile, Geoff Molson said he doesn't foresee the brewer following the lead of auto parts company Magna International by abandoning its dual share structure.
"We believe that the structure that we have in place as a Molson family and a Coors family is one that is in the best interests of our shareholders for the long-term," he said.
Molson denied that the 2005 merger ceded some control of the company even though the decision-making is largely based in Denver and Coors Lite has become the cross-border brewer's largest brand.
He said the company's goal is to grow its market share in Canada and abroad and he applauded management's efforts to turn around the flagship Molson Canadian brand by launching an ad campaign during the Vancouver Olympics.
"The Olympics is a once in a generation opportunity and Molson Canadian took the bull by the horns and did a great job re-educating consumers about how important this brand is to all Canadians."
