The Justice Department cleared the way for SABMiller PLC and Molson Coors Brewing Co. to combine their U.S. operations, in a deal that promises to create more potent competition for industry leader Anheuser-Busch Cos.
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The deal is in part a reaction to the tepid sales growth of mass-market beers in the U.S., as many consumers switch to small-batch “craft” brews, imports, wine and spirits.

SABMiller PLC

MEMORANDUM

From:  Graham Mackay, CEO, SABMiller plc
To:  Leo Kiely, CEO, Molson Coors Brewing Co.
Re:  Merger
Sent:  June 2, 2008

Dude:

The M&A Committee on our side has finished its review.  The report identifies a handful of products that continue to exhibit market creep, including small-batch “craft” brews, imports, wine, and spirits.  To recap what we have already discussed, we have a number of ways of overcoming these persistent challenges:

(1) Acknowledge the towering inferiority of our beer; create better-tasting beers
(2) Add lime flavoring to the rest of our existing product lines
(3) Produce more TV commercials
(4) Merge with a company essentially identical to our own (with the exception that that company claims to create a beer “colder” than its competitors, a claim so absurd as to defy a coherent rebuttal)

(1) is, of course, bogus.  (2) is a solid backup option and one worth testing in smaller markets.  (3), while attractive, is technically impossible.  Thus, we are left with (4).  While merging does not directly address the problems either of our company faces in any way, it would be totally awesome.  Anyway, the DOJ is expected to approve the proposal late this week or early next week.

Yours sincerely,

Grammy

Tags: business, miller, add lime flavoring, doj, coors