WISCONSINREPORT.COM (07/16/08) - Now that Miller Brewing Company and Coors have joined forces to become MillerCoors, changes were expected to take place as is usually the case when two major companies merge. MillerCoors have announced that it is placing its headquarters in Chicago, but will maintain substantial operations in Golden, Colorado, and Milwaukee, Wisconsin. MillerCoors will invest over $50 million into the brewery in Milwaukee over the next three years and increase the number of jobs at the brewery, even though headquarters office jobs will be lost to the city.
A MillerCoors spokesperson says the company picked Chicago for a variety of reasons. One of them: Picking a neutral site reflects the 50-50 governance structure agreed to by SABMiller plc and Molson Coors Brewing Company. They felt that picking one of the hometowns would have indicated one brewer had taken over the other.
The brewer will maintain substantial operations at current offices in both cities and will be investing tens of millions of dollars into the breweries over the next three years.
While some positions will be relocated to the headquarters, the employee base in the hometowns will be far larger than in Chicago.
“We believe both Golden and Milwaukee stand to gain in the MillerCoors deal since our operations in both cities will now be part of a stronger, more competitive number two player in the U.S. beer business,” said MolsonCoors CEO Leo Kiely. “This ultimately will strengthen our long-term economic and social impact in both of our hometowns and secure the future of brewing in both locations.”
In Milwaukee, MillerCoors plans to invest $50 million in the brewery over the next three years. The Milwaukee campus will house the MillerCoors Eastern Division office, the Great Lakes sales region office as well as major parts of the finance, IT, human relations and operations division, as well as other functions.
MillerCoors will have $12 million in marketing alliances in the city as well as $1.6 million in cultural, civic and environmental partnerships.
In Golden, MillerCoors will invest more than $100 million in the brewery over the next three years. It will house the Western Division office, the Mountain sales region office and major parts of the finance, IT, human relations and operations divisions, as well as other functions.
It also has more than $2.7 million in cultural, civic and environmental partnerships.
The headquarters for Molson Coors Brewing Company will remain in Denver.
Roughly 150 to 175 jobs will be affected in both Milwaukee and Golden due to the headquarters decision. Also, additional job impacts will occur over the next three years as MillerCoors moves to achieve its committed synergies.
“The decision to select Chicago as the location for our corporate headquarters was made to achieve our goal of becoming the best beer company in America by having access to an attractive base of talent, transportation and business resources,” Kiely said. He also pointed out that Chicago offered:
- A central location enabling convenient access to existing U.S. operations and customers
- A cross-section of affordable communities for relocating employees to choose from
- Favorable economic incentives from the State of Illinois and City of Chicago to assist in offsetting considerable relocation costs
- A number of viable real-estate options which provide good access for commuters, building signage, amenities and which could be ready for occupancy by early summer 2009
“While these decisions and changes are never easy, this is what we truly believe is best for our company and to secure the future of brewing in Golden and Milwaukee,” Kiely said in a memo to employees. “Our hometowns will benefit by being part of a stronger, more competitive player in the U.S. beer business.”
On June 30th 2008 SABMiller plc (SAB.L) and Molson Coors Brewing Company (NYSE: TAP; TSX: TPX) June 30, 2008 announced the closing of the transaction to combine their U.S. and Puerto Rico operations to create MillerCoors.
MillerCoors, began operating as a combined entity on July 1, 2008.
“As a unified company with a world-class board and leadership team in place, MillerCoors will be able to create tremendous opportunities for innovations in products and services that will allow us to drive profitable growth,” said Pete Coors, Chairman of MillerCoors. “Personally, I am thrilled to be part of such an exciting and innovative organization and look forward to serving as the Chairman of this new business.”
Graham Mackay, Chief Executive of SABMiller, said, “Today is an historic day in the American beer business, not only for the shareholders of both SABMiller and Molson Coors, but for MillerCoors consumers, employees, distributors and business partners. Now that the transaction has closed and MillerCoors is a reality, the strong leadership team we have put in place is ready to execute and realize the tremendous potential of this great organization.”
Leo Kiely, Chief Executive of MillerCoors, said, “MillerCoors will be entrepreneurial, with the ability to operate with speed and agility in the marketplace, backed by the powerful combined resources of two exceptionally successful companies. We will drive profitable growth and bring new energy to the U.S. beer industry. Our focus now is to deliver on the $500 million in identified annualized cost synergies by improving sourcing across our eight major breweries, building a streamlined organization and leveraging the scale of the new company. Our talented people are experienced and passionate about this business and – importantly – are determined to win.”
Upon learning of the MillerCoors decision to move the combined companies headquarters to Chicago, Milwaukee County Executive Scott Walker says the arrangement will continue to benefit the Milwaukee area.
“MillerCoors serves up a good deal for Milwaukee County. MillerCoors will invest over $50 million into the brewery in Milwaukee over the next three years and they will increase the number of jobs at the brewery in Milwaukee to levels not seen since the 1970s,” Walker stated.
“In addition, they will continue their strong corporate leadership and investment in Milwaukee, Milwaukee County and Wisconsin. From Miller Park to the Miller Stage at Summerfest to the Miller Giraffe Experience at the Milwaukee County Zoo, they will continue to be a major player in our community,” Walker continued.
“Overall, a strong MillerCoors means a strong Milwaukee,” according to Walker.