MONTREAL, July 22 (AFP) - Canada`s Molson and US-based Coors announced plans Thursday for a "merger of equals" creating the world`s fifth largest beermaker by volume.
The deal "will create a new company with the operating scale and balance sheet strength to take a leading role in the consolidating global brewing industry," the companies said in a statement.
With combined beer sales of 60 million hectoliters (51 million US barrels), the company to be named Molson Coors Brewing Company will be the world`s fifth largest brewing company by volume, the statement said.
Combined sales of the two firms were estimated at some six billion US dollars.
The merger is expected to generate annual savings of some 175 million US dollars by 2007.
"This transaction allows us to create a stronger company in a consolidating global industry while preserving Molson`s rich heritage as North America`s oldest beer company and Canada`s leading brewer," said Eric Molson, chairman of the Canadian firm.
"We are extremely pleased to be combining with Coors, one of the world`s most respected brewers, in such a strategically compelling merger. We look forward to working together to realize the full potential of the new company."
Peter Coors, chairman of the US firm, added: "I am very proud to see the company started by my great-grandfather more than 130 years ago combine with a company of Molson`s caliber and heritage."
The combined company will have brands including Coors Light, Molson Canadian and Carling, the top brand in Britain.
Additionally, the companies have distribution or licensing agreements with other brewers, including Heineken, Grupo Modelo, Grolsch, FEMSA, Foster`s and SABMiller.
A potential tie-up between the two breweries would not be without irony in Canada.
Molson has aggressively marketed its premier brand "Canadian" comparing it to supposedly inferior US beers, and championing the Canadian lifestyle and customs over those south of the border, suggesting beer drinkers in Canada are more discriminating -- using the slogan "I am Canadian."
Both companies have been suffering in the face of consolidation and strong market-share gains by competitors, including Anheuser-Busch, SABMiller and Interbrew.