Coors emerged as the surprise winner over Christmas in the bidding war for UK lager Carling. Mark Stretton examines the history of the US brewer.
Late on Christmas Eve, as millions savoured a festive pint, executives from Adolph Coors, the US brewer, were putting the finishing touches on a smash-and-grab raid for Britain's best-selling lager.
The capture of Carling has catapulted Coors to number two in the UK market behind Scottish & Newcastle, some achievement considering its beers were not sold nationally in America until little more than a decade ago.
For £1.2bn, Coors will also take control of the Worthington and Caffrey's ale brands, the UK rights to the Dutch beer Grolsch and a clutch of other brands including Reef and Hooch, giving the US brewer between 18 and 19 per cent of the British market.
Few expected Coors to win the fiercely contested battle, which was forced on Interbrew by the competition authorities after its £2.3bn purchase of Bass Brewers in August 2000.
By Christmas Goldman Sachs and Lehman Brothers, the financial advisers handling the auction process, had received five bids.
Leading the chase for Carling was the much-fancied Heineken, Europe's largest brewer, followed by a consortium headed by Canada's Molson and two private-equity bidders - Apax Partners and a joint bid from CVC Capital Partners and Cinven.
Constellation Brands, the US business that owns drinks wholesaler Matthew Clark, failed to submit an offer. Four days later, Coors emerged as the preferred bidder and proud new owner of the Carling Brewing Company.
The sensible money for Carling was on Heineken. Everyone assumed that the deep pockets of the Dutch giant would supersede all other bids.
Heineken had the greatest strategic need for Carling. In Britain its lager is sold as a standard beer rather than a premium brand like its rival Stella Artois.
With Carling as Britain's leading standard beer it could have relaunched Heineken at the top end of the market.
ThePublican.com wrote in November that Coors would enter the bidding but its interest in Carling dates back further. It was one of the underbidders when Interbrew acquired Carling and the other Bass Brewers labels in 2000.
According to industry sources, this time round Coors and its advisers - investment bank Morgan Stanley and accountant Ernst & Young - worked more aggressively in its due diligence than other rival bidders.
When it came to the crunch, Coors was primed. It was prepared to increase its bid and had drawn up a contract that was virtually ready to be signed.
Few expected Coors to win and despite the victory, many are yet to be convinced of the merits of the deal.
The £1.2bn asking price is a huge sum for a company valued at $1.7bn (£1.17bn). Coors financed the transaction by taking on $1.5bn of debt.
The US brewer has essentially bought into a declining market - beer sales are shrinking and wine and food now account for a larger percentage of the pub pound.
The scepticism has been reflected in the markets where shares in Coors, already down a third this year, fell another five per cent when the deal was announced.
Stuart Price, beverages analyst with WestLB Panmure, does not see the logic. "The brands have outperformed the rest of the British market but the deal is not very meaningful for investors," he said. "I cannot see any synergies or any sense. Perhaps it is a defensive play against a bid. It also diversifies risk away from the US."
On these shores, Coors is relatively unknown - some products, like Coors Light and Coors Gold, have been around for a few years without making significant impact, and a sponsorship deal with Chelsea football club failed to raise the company's profile.
Founded in Colorado in 1873 by Adolph Coors, the company has emerged as the third-largest brewer in America, behind rivals Anheuser-Busch and Miller.
It has a colourful history and in the past was boycotted by many gay and lesbian and other groups, over its links with right-wing organisations.
The company was dogged by a bad reputation because of an allegedly oppressive environment where job applicants had to undergo a lie-detector test that included questions about their sexuality.
The Coors family itself is famed for its controversial stances on social issues. It has funded the John Birch Society, an ultra-conservative group set up to fight the threat of Communism in the US.
Joseph Coors, a prominent member of the family, clashed with civil rights groups in the sixties when he sat on the University of Colorado's board. His wife Holly is a prominent member of the Washington-based Heritage foundation, a high-profile right-wing think tank.
Some say the family feared the threat of aliens that come in the shape of black and gay people, communists and trade unions, and this is why it set up home in the isolated Rocky Mountains of Colorado.
In recent years, under the leadership of Peter Coors (pictured), the company has gone to great lengths to shake off its tarnished image.
A quick look at its website (www.coors.com) gives a clear indication of a company trying to escape its past.
The site is compact but extensive sections are devoted to addressing Coors' stance towards minority groups, including one page, entitled "Coors and Gays and Lesbians". It kicks off with a passage that reads: "Coors Brewing Company recruits, hires and promotes individuals regardless of race, colour, national origin, sexual orientation, religion, disability, veteran status, age or sex."
Coors has received recognition for its efforts - it was named in Fortune Magazine's "Diversity Elite", a list of America's 50 best companies for minorities in 1998, 1999 and 2001.
The latest incident to hit Coors' less than perfect public persona came last year when it incurred the wrath of environmental groups across America.
It dumped 80,000 gallons of beer into a river by the company's state-of-the-art brewery, killing an estimated 50,000 fish. It was fined $500,000 for the incident.
Coors' future promises to be almost as interesting as its past, but almost certainly for very different reasons.
The Carling deal is a bold move, especially considering that Bill Coors, family patriarch and chairman of the parent company, had long insisted the brewer did not need an international presence.
Previous licensing deals with Molson in Canada and Asahi in Japan have turned sour over royalty payments. Molson paid Coors £72m to settle their dispute.
Coors does have a presence in about 30 countries around the world but the acquisition of Carling is its first major step outside North America.
It is not known what plans the new owner has for Carling. A spokesman told thePublican.com: "Early indications are that Coors is very pleased with the Carling Brewing Company and its current position.
"We will know more in February when all the loose ends will be tied up."
It is thought the US brewer will use its now considerable foothold in Britain to promote its other brands. Jerry Fowden, chief executive of Bass Brewers, is tipped to lead the British arm.
Many fear that Coors will rationalise its activities here, with redundancies and brewery closures (Coors takes over four) a distinct possibility.
Truly global businesses continue to dominate the brewing industry and the relentless consolidation shows no signs of slowing down. Elsewhere, Interbrew has been linked with South African Breweries and Britain's last remaining big player, Scottish & Newcastle - recently linked with Miller - is tipped to do the next deal.
With Carling in the bag, Coors still has it all to prove. As Stuart Price observed: "Many suspect Coors overpaid for Carling and it is difficult to see where the company goes from here."
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