Molson Coors sells controlling stake in Brazil operations to FEMSA
Following the transaction, Molson Coors will own 15 percent of Kaiser and have one seat on its board. Heineken NV remains a 17 percent equity partner in the Kaiser business.
17/01/06 Molson Coors Brewing Company has announced that it has sold a 68 percent equity interest in its Brazilian unit, Cervejarias Kaiser ("Kaiser"), to FEMSA Cerveza S.A. de C.V. ("FEMSA") for US$68 million cash, including the assumption by FEMSA of certain Kaiser-related debt and contingencies.
Following the transaction, Molson Coors will own 15 percent of Kaiser and have one seat on its board. Heineken NV remains a 17 percent equity partner in the Kaiser business.
Kaiser financial debt totaled approximately US$60 million at closing. While Molson Coors believes that all significant contingencies have been disclosed as part of the sale process and adequately reserved for on the Kaiser financial statements, resolution of contingencies and claims above reserved or otherwise disclosed amounts could, under some circumstances, result in additional liabilities for Molson Coors because of transaction-related indemnity provisions.
Molson Coors intends to report Kaiser results for the fourth quarter and full year of 2005 as discontinued operations in its financial statements. Following this transaction, Molson Coors intends to report its interest in Kaiser in its financial statements using cost-method accounting.
J.P. Morgan Securities Inc. acted as exclusive financial advisor to Molson Coors and provided a fairness opinion in relation to the transaction.
Separately, Molson Coors Brewing Company announced that it expects to report lower consolidated sales volume and earnings per share, excluding special items, for the fourth quarter of 2005 versus the comparable pro forma fourth quarter of 2004. Although financial results have not been compiled yet for the 13-week fourth quarter ended December 25, 2005, the company expects lower earnings primarily due to higher costs, difficult industry pricing in key markets and non-recurring factors.
Consolidated fourth quarter 2005 sales volume declined approximately 2 percent, and consolidated sales to retail decreased about 1-1/2 percent versus the pro forma fourth quarter of 2004. Canada segment sales to retail were virtually unchanged compared to the pro forma period a year ago, while sales volume increased slightly versus prior year. In particular, Coors Light sales to retail in Canada continued to grow at a double-digit rate. Comparable fourth quarter U.S. sales volume to wholesalers was virtually unchanged, while sales to retail grew approximately 1 percent versus a year earlier, driven by low-single-digit growth of Coors Light. Europe segment sales to retail decreased about 3-1/2 percent compared to a year ago, while Brazil sales to retail declined approximately 7 percent on a comparable basis versus a year ago.
The company generally does not release any financial information prior to an earnings release for the relevant period but is disclosing the above information in connection with the disclosure regarding the sale of its Brazil operations.
Additional financial information will be available with Molson Coors Brewing Company's fourth-quarter 2005 earnings release, scheduled for Feb. 9, 2006. The company will conduct an earnings conference call with financial analysts and investors at noon Eastern Time on this date to discuss the company's 2005 fourth quarter financial results.
Molson Coors Brewing Company is the fifth-largest brewer in the world. It sells its products in North America, Europe, Latin America and Asia. Molson Coors is the leading brewer in Canada, the second-largest in the U.K, and the third-largest in the U.S. The company's brands include Coors Light, Molson Canadian, Molson Dry, Carling, Coors and Keystone.
