Brasil & Canada: Molson brewery wants remaining in Brazilian market
Molson Coors Brewing Co. reiterated on September 20 that it is looking at a range of options, including third-party discussions, for its Brazilian operation in wake of speculation that it was close to selling the division, according to Associated Press. In a Securities and Exchange Commission filing, the world's fifth-largest brewer repeated a position first announced in May that it wants to remain in the Brazilian market if it can do so "on a winning basis."
The filing came on the heels of unconfirmed reports and some analyst speculation that Molson Coors was negotiating a sale of the poor-performing division, Cervejarias Kaiser. Many believe the company would be better off if it sold the unit. "The expectation is that they are looking to sell it clearly," said analyst Bill Chisholm who tracks Molson Coors for Dundee Securities.
"They're not putting any more money into it, and it seems to be at very best stagnant, if not still deteriorating, so it needs someone who is more committed to it to get it turned around," he said.The SEC filing likely was submitted to help "ward off press speculation," he said.
In May, Molson Coors CEO Leo Kiely said the parent company would not put additional money into the Brazilian unit until it stopped losing money.
The Denver-based company reported a 46 percent drop in second-quarter net income, burdened by $87.7 million in special charges and stiff competition, particularly in Britain and Brazil. It reported net income of $38.5 million for the quarter, down from $72 million the previous year.
Molson Coors Brewing was formed this year with the merger of Canadian-based Molson Inc. and Golden, Colo.-based Adolph Coors Co. Brands include Coors Light, Molson Canadian, Molson Dry, Carling, Kaiser, Coors, and Zima.
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