Food and Beverage Sector Ideas

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Molson Coors - >>> These 5 companies could disappear in 2018’s wave of M&A



By Jeff Reeves

Dec 6, 2017



https://www.marketwatch.com/story/these-5-companies-could-disappear-in-2018s-wave-of-ma-2017-12-06



Molson Coors

The merger of Molson Coors TAP, +0.93% with SABMiller in 2016 created the world’s third-largest beer brewer. It also create a one-stop shop for stodgy domestic beers that nobody likes in the age of mixed drinks and microbrews.

It’s no wonder, then, that the stock has been steadily dripping downward since the deal closed and has suffered a nearly 20% decline so far in 2017. Cheap watery beers aren’t a growth industry anymore — and no, Blue Moon doesn’t count as a premium offering, my friends.

So what’s the endgame for Molson Coors? Diageo PLC DEO, +1.81% DGE, +1.36% could pursue the brand; it already has Guinness stout and still has room for a few other brews in its portfolio to compliment an array of spirits like Tanqueray gin and Johnnie Walker whiskey. Or heck, megabrewer Anheuser Busch InBev BUD, +0.03% is already roughly 10 times the size, so why not just buy up this competitor and shutter the weakest brands to consolidate the market?

One way or another, Molson Coors is going away. The stock doesn’t have a bright future, and management will be eager to forge a deal with any suitors in 2018 to prevent further erosion of shareholder value.

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