News came today announcing that the two producers of the well renowned beers, Coors and Miller Lite, have teamed up to create a joint venture that will have to compete with Anheuser-Busch (NYSE:BUD), leader with over 40% of the brewing operations in U.S. and producer of Budweiser, Michelob and Bud Light.

The joint venture between Molson Coors Brewing Company (NYSE:TAP), with 42% and London’s SABMiller plc (LON:SAB) with 58% will be called MillerCoors and will be responsible for selling Miller Lite, Miller Genuine Draft, Coors, Coors Light and Molson Canadian.

Beside the fact that they want MillerCoors to become the number one beer producer in the US with an estimated production of 69 million barrels that accounts for $6.6 billion, the $500 million cost saving in the next three years sounds pretty good. They will reduce shipping distances, optimize production and eliminate duplicate departments like marketing to make their joint-venture more profitable but killing costs brings up a few problems.

Who will handle the marketing campaigns and who will be the mind behind the TV spots because I am sure some like Miller’s and some like Coors’. Another problem I can see is, delivering the news to the employees. It’s not easy to tell people they need to search for another job.

Though I brought up those negative things up, I do believe that MillerCoors will do great  fighting for the first place in such a market. Investors should also be happy, because from what Cramer said, this is an under evaluated company with great financial support.

Filed under Business
Tags: Anheuser-Busch, Coors, joint venture, merger, Miller, Miller Coors, MillerCoors, Molson Coors, SAB Miller, SABMiller