Molson Inc. buys Brazil's Kaiser - Brief Article - Statistical Data Included

Modern Brewery Age, April 1, 2002

Molson, Inc. has acquired Kaiser, the second largest brewer in Brazil, with net sales revenue of $326.4 million. The transaction, valued at $765 million, will increase Molson's market share in Brazil from 3.1 percent to 17.8 percent, making it the second largest brewer in Brazil and the 13th largest in the world.

As part of this transaction Molson will combine Bavaria, its existing operation in Brazil, with Kaiser. Heineken will acquire 20% of the new combined entity for a consideration of approximately $220 million. In addition, this partnership agreement with Heineken includes the extension of the Canadian distribution agreement for a period of 10 years and the extension of the licensing agreement for the Heineken brand in Brazil.

"This transaction strengthens Molson's continuous commitment to delivering long term shareholder value," said Dan O'Neill, President and CEO of Molson Inc. We feel the opportunity is immense, as Kaiser offers many of the same efficiency opportunities that Molson had in Canada three years ago. In addition, the partnership with Heineken opens up new opportunities for value creation."

Brazil is the world's fourth largest beer market, four times the size of the Canadian market, and forecasted to surpass third-place Germany by 2007. Molson first entered the market on December 21, 2000 with the acquisition of Bavaria and believes more than ever in the growth potential of the Brazilian beer market, which has an eight-year average growth rate of 6.9 percent and a three-year average growth rate of 2.9 percent.

The Kaiser Pilsen brand represents 89 percent of Kaiser's total sales, making it the 13th largest brand in the world. Kaiser's total share is 14.7 percent of the Brazilian beer market. First established in 1982, Kaiser was primarily owned by Coca-Cola (10.3 percent), Heineken (14.2 percent) and the Coca-Cola Bottlers of Brazil (75.5 percent).

"By closing the market share gap with AmBev, the transaction makes Molson a stronger competitor and creates a more competitive beer market in Brazil, which will clearly benefit the Brazilian consumer," added Mr. O'Neill. "We believe that Kaiser's management team and the bottlers will provide considerable expertise in support of this transaction and contribute to the continued success of Molson's operations in Brazil."