Juggling Shareholders’ Expectations: The Molson-Coors Merger

Description

Juggling Shareholders’ Expectations: The Molson-Coors Merger: Abstract

On July 21, 2004, Molson’s board approved a merger of equals between Molson and Coors. For Eric Molson, chair of the board since 1988, and also head of the Molson family and controlling shareholder, this merger with a strategic partner of similar size would make the merged company – Molson Coors – the fifth-largest brewer in the world. Before this could happen, however, Molson shareholders had to be convinced that this merger would be fair to everyone, not just to the Molson family members who held Class B shares (with voting rights). The merger would require the approval of two-thirds of both the voting and non-voting classes of Molson shareholders. This was far from a done deal since a merger of equals is a zero-premium deal for shareholders. The case explains how Eric and other stakeholders managed to convince Molson shareholders to approve the merger of equals with Coors.

Learning objectives

• Understand the different types of shareholder in public family firms and the consequences of this diversity in terms of governance and strategy
• Understand the efforts required of the board and senior executives of a public firm to sell a strategic course to shareholders
• Analyse the rational, political, and symbolic dimensions of decisions and the need to manage all aspects of them

Main themes covered

• Shareholders
• Mergers
• Governance
• Family Business
• Power

Additional information

Teaching notes are available for University teachers only. Please contact Centre de cas HEC Montréal to request them.