CHICAGO SABMiller Brewing and Molson Coors are merging their domestic operations in a joint venture called MillerCoors.
The venture will have combined net revenue of about $6.6 billion and combined beer sales of 69 million barrels in the U.S., according to the companies.
The two companies' parents, SABMiller and Molson Coors, will each have a 50 percent voting interest in the new venture. In terms of economic value, SABMiller will have a 58 percent stake, while Molson Coors' interest will be 42 percent.
Pete Coors, vice chairman of Molson Coors, will serve as chairman of MillerCoors, while SABMiller CEO Graham Mackay will serve as vice chairman. Molson Coors CEO Leo Kiely will be CEO of MillerCoors, while Miller Brewing CEO Tom Long will be president and chief commercial officer. Other senior managers will come from the two companies.
"This transaction is driven by the profound changes in the U.S. alcohol beverage industry that are confronting both of our companies with new challenges," said Pete Coors, in a statement. "Consumers are broadening their tastes and are increasingly looking for greater choice and differentiation; wine and spirits companies are encroaching on traditional beer occasions, and global beer importers and craft brewers are both taking a larger share of volume and profit growth."
The companies said the merger will present greater choice for consumers with greater distribution and access to imported brands such as Peroni, Molson and Pilsner Urquell, craft brands like Blue Moon and Henry Weinhard's and specialty beers such as Miller Chill and Sparks. The companies identified cost savings of $500 million from the merger.
The deal is still subject to a final agreement and approval from U.S. regulatory authorities and Molson Coors Class A shareholders.
It was not immediately clear how advertising and marketing assignments would be affected by the deal. SABMiller agencies include Publicis Groupe's Starcom (media), WPP Group's Young & Rubicam, and Publicis Groupe-backed Bartle Bogle Hegarty and Publicis Groupe agencies Digitas and Arc. Molson Coors lead agency is Interpublic Group's DraftFCB.
MillerSAB and Molson Coors had $445 million in combined advertising expenditures last year, according to Nielsen Monitor-Plus. Miller accounted for $245 million of that number.