E-Malt.com News article: 4091

Canada, Montreal: Molson Inc.’s chairman Eric Molson may have to contend with the ghost of the 219-year-old Canadian brewer's founder when he casts his majority stake in favor of merging the company with Adolph Coors Co. on Friday, January 28. According to Reuters, legend has it that when founder John Molson died in 1836, his will stated that his portrait must be removed from the Montreal-based company's boardroom if the brewery were ever to pass into the hands of strangers.

It is unclear whether John Molson's portrait will come down, but his creation's days as an independent brewer will end if shareholders back the $4 billion merger. A Molson-Coors trust will control the combined company. "I think John Molson would be devastated, and not just John, but many of the ancestors," said Karen Molson, a seventh-generation descendant of John Molson and cousin to Eric Molson. "I am disappointed in the whole idea that these long centuries of history could come to this point," she told Reuters.

Eric Molson has headed the brewer since 1988. Industry observers say he has been instrumental in bringing the company back to its core brewing business after two decades of ill-advised diversification into chemicals and hardware. But Eric Molson was also behind the company's $765 million acquisition of Brazilian brewer Kaiser in 2002, which has drained profits and eroded asset value. Now 66-year-old Molson will preside over Molson's controversial marriage to Colorado-based Coors.

The deal will make the combined company the world's fifth-largest brewery in terms of volume, with revenues of more than $6 billion.

But it has come under fire from investors and analysts unhappy about the lack of an open bidding process for Molson that could have produced a premium to the Coors offer for shareholders. The controversy has cast Eric Molson -- previously seen as quiet and unassuming -- as a hard-edged, uncompromising businessman unwilling to relinquish his hold on the company. "The company is not for sale," he said after the world's third-largest brewer, SABMiller, said it was interested in talking to Molson if the merger with Coors failed. "Nor will we sell to other groups for the sake of short-term financial gain. We will continue to put the company ahead of our own interests, even if it means further dilution of our equity position in the company through the addition of a third partner within the new Molson-Coors global platform."

The merger deal has forged a wide rift between Eric Molson and his distant cousin, Ian Molson, the brewer's former deputy chairman, who tried to mount a competing bid. "I would say the family is very much divided over the merger," said Karen Molson. "There's always divisions in families but never over so galvanizing an issue as this."

Friends, acquaintances and co-workers describe Eric Molson, the father of three children, two of which are involved in the family business, as a consensus builder who makes decisions after extensive research.

"He's almost embarrassed by any form of recognition. He will always stand in the background and make sure that it's someone else being recognized," said Lillian Vineberg, who worked with Molson -- currently chancellor of Montreal's Concordia University -- when she was chairwoman of the board of governors at the university. Molson refused to have his name attached to Concordia's "John Molson School of Business", which the brewer endowed with C$10 million ($8 million). "The university really wanted his name on the building because he has given so much of himself as well as his funds and he absolutely refused. He only allowed John Molson's name to be used after much much pressure," Vineberg said.


30 January, 2005