MONTREAL – Molson Inc. (search) shareholders approved a $4 billion plan to merge Canada's oldest brewer with U.S.-based Adolph Coors Co. (RKY) Friday, clearing the way for Coors shareholders to bless the union Tuesday.
The deal, which was sweetened twice to woo disgruntled Molson shareholders, won the favor of 80.2 percent of its class A shareholders and 84.3 percent of its class B shareholders.
The merger will create the world's fifth-largest brewer by volume just behind Dutch Heineken with revenues of more than $6 billion and allow it to compete in the rapidly consolidating global beer market.
It will also put the operations of 219-year-old Molson in the hands of Americans and mark the end of an era for a brewer whose flagship brand, Molson Canadian (search), has been extensively marketed with appeals to patriotic pride.
"Let's hope it works. Molson is a very Canadian company, very Montreal," said 82-year old Madelaine Osterman, a Molson shareholder for the past 20 years who voted in favor of the merger.
Coors said it has already received proxies that indicate a majority of its shareholders favors merging with Molson.
"We need 50 percent plus 1 vote of those outstanding and we already have more than 50 percent plus 1 voting in favor of the deal," said spokeswoman Laura Sankey.
Pending Quebec court approval on Wednesday, the merger is slated to close Feb. 9.
Molson shareholders will own 55 percent of the combined company, with the Molson and Coors families sharing voting power.
Coors Chief Executive Leo Kiely and chief financial officer Tim Wolf will keep those posts at the merged company. Molson's chief executive Dan O'Neill will be involved with integration.
Brewing giant SABMiller (search), which had said it was interested in talking to Molson should the plan with Coors fail, declined to comment Friday.
Molson's Class A shares were down 12 Canadian cents at C$38.23 on the Toronto Stock Exchange. Coors shares fell C$1.11 to $73.78 on the New York Stock Exchange.
Friday's vote in Montreal was anticlimactic as no shareholder stood up to oppose the merger plan.
Beyond saying he was pleased with the outcome, Eric Molson, the company chairman who spearheaded the merger campaign, and other executives refused to comment or answer questions from the media.
During the lull while votes were being tallied, Molson played their beer ads showing scantily clad women on Brazilian beaches and in nightclubs.
Dogged from the start by opposition from big pension funds and managers, the merger plan went through a series of changes. Those included quashing a plan to allow option holders to vote, and adding a C$5.44-a-share dividend payable on Molson class A and B common shares.
Molson officials would not confirm which of the big institutional shareholders supported the deal, except to say the company was somewhat surprised by the high level of support.
"We felt that the momentum was reversed about 10 days ago, but there was a number of large shareholders who did not want to come forward with their decision," said spokeswoman Sylvia Morin.
Caisse de Depot et placement du Quebec, Canada's largest institutional investor, told Reuters that it cast its 3.2 million class A shares in favor of the merger, as did CPP Investment board with its 1.6 million class A shares and 145,000 class B shares.
($1-$1.24 Canadian)
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