MOLSON COORS BREWING CO
OPPORTUNITIES (4) M&A Opportunities ■■
Management and the Board have a proven track record of creating shareholders value through careful acquisition/merger/JV transactions. We believe there will be further industry consolidation, and the Company will be able to take advantage of the opportunities to create further value for the shareholders.
Long-Term Minded Controlling Shareholders ■■
The Molson and Coors families have allowed/guided Management to execute corporate decisions that sometimes cause short-term pain but create long-term value (e.g., suspended share buybacks and frozen dividends to deleverage, increase debt/leverage to acquire).
Further Cost Saving Initiatives ■■
We are impressed by Management’s recent statement that its 2017-2019 cost saving program will now deliver +27% additional cost savings than originally planned, which has seen an upgrade of total cost savings from USD550M to USD700M. Higher margins may also produce a virtuous cycle which could further accelerate the re-rating of the stock.