January 29 2005, 8:38 AM
This was a rare merger vote where there was actually doubt as to whether the deal would be approved, but the shareholders of Canada's Molson Inc. voted to approve a merger deal with Coors Brewing Co. of Golden yesterday. The Toronto Globe and Mail reports that the vote was closer than the 80 percent plus margin in favor of the deal might indicate:
If Molson's largest shareholder, AIM Funds Management Inc., had voted against the deal, it would not have received the necessary two-thirds support. For the weeks leading up to the vote, AIM portfolio manager Ian Hardacre worked in a coalition with Burgundy Asset Management Ltd. and AGF Management Ltd. to try to extract a better deal. In December, he went to Golden, Colo., to see the Coors operations, and deliver a message: AIM liked the merger but not the price.Coors sweetened the deal, and AIM came on board. Ultimately, merger opponents didn't even show up at the Molson shareholders' meeting, probably knowing in advance what the result will be. The proposed merger was much more controversial among shareholders of Molson, one of Canada's oldest corporations, than it was for Coors shareholders, who are predicted to approve the merger easily next week. Possibly to assuage Canadian pride, the new company will be called Molson Coors, not Coors Molson. And it would not be surprising, if only for tax reasons, if the merged company ended up being incorporated in Canada. Some question whether the merger will end up benefitting either Molson or Coors, but profitable or not, this deal has permanently changed two old, family-run brewing companies.