The Week

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Amerger of Adolph Coors Co. and Molson is unlikely to dent the domestic fortunes of No. 1 Anheuser-Busch Cos. and No. 2 SABMiller's Miller Brewing Co. Coors and Molson last week said they had agreed to form the Molson Coors Brewing Co. Eric H. Molson will serve as chairman of the combined company, while W. Leo Kiely III will be CEO, the position he holds at Coors. Coors' ad agencies are Interpublic Group of Cos.' Foote, Cone & Belding, Chicago, and Deutsch, Los Angeles. Molson's U.S. shop is MDC Partners-backed Crispin, Porter & Bogusky, Miami. While the merger would result in a larger company, the end result is not clear, said Eric Shepard, executive editor, Beer Marketer's Insights. "Coors is facing stiff competition from Anheuser-Busch and an increasingly stronger Miller Lite. Molson won't give it a lot of synergies that are obvious." The merged company will remain the country's No. 3 brewer, with 11% share, the position held by Coors. QwikFIND aap82n

IPO planned for Dreamworks unit

Dreamworks SKG announced long-awaited plans to spin off its animation division, holding an initial public offering in early fall. The move, anticipated for months, is intended to raise as much as $650 million in common stock. Analysts said the timing capitalizes on the huge box office numbers of "Shrek 2," and hedges bets on the upcoming October release of the underwater mob-themed "Shark Tale." The IPO, filed with the Securities and Exchange Commission July 21, is Dreamworks' attempt to play in the big league of animation powerhouse Pixar Animation Studios. "They're looking for a Pixar-style valuation," said David Miller, an analyst with Sanders Morris Harris. "Whether they receive it or not is up in the air at this point." QwikFIND aap83d

Schwab back on top of company

Charles Schwab Corp. founder Charles E. Schwab returned to helm the company, replacing CEO David Pottruck. Mr. Pottruck was dismissed by the board of directors shortly before the company announced a 10% drop in net income during the first half, in spite of a 9% increase in revenue. Mr. Pottruck, a 20-year Schwab veteran, started as exec VP-marketing and advertising. Schwab has battled sliding market share as online rivals pick up discount clients with cut-rate fees as low as $8.95 per trade. It recently joined the price fight with ads touting its own Trades for Less platform, with prices as low as $9.95 per trade.

AT&T scales back consumer business

Megabrand AT&T is setting out on a new marketing strategy which will mean the end of its long run as one of the world's premier consumer brands. AT&T Chairman-CEO Dave Dorman said last week the company will adopt a new strategy focused on its higher-margin business-to-business efforts. "The fact is the residential telecom market has transformed by competition to a market of bundles with more than 40% of American households now taking some form of bundle service and the number is growing rapidly," with new services including video, wireless and broadband, Mr. Dorman said. AT&T severely cut its ad spending from 2002 to 2003, according to TNS Media Intelligence/CMR. B-to-b spending dropped 63.1% to $14.9 million in 2003. Consumer advertising dropped 47.1% to $122 million in 2003. WPP Group's Y&R Advertising, New York, handles. QwikFIND aap83e

J.P. Morgan Chase cuts to four shops

J.P. Morgan Chase, the official entity created from the July 1 merger of J.P. Morgan Chase & Co. and Bank One Corp., is in discussions with a short list of four agencies to handle advertising for its retail bank business, according to executives familiar with the matter. The four shops involved are: independents McGarry Bowen and Gardner Nelson & Partners, both New York; Omnicom Group's BBDO, New York, and Interpublic Group of Cos.' Hill, Holliday, Connors, Cosmopulos, Boston and New York, said knowledgeable executives. According to TNS Media Intelligence/CMR, J.P. Morgan Chase spent $43 million in measured media in 2003; Bank One spent $143 million. Presentations are set for the second week of August. QwikFIND aap82y


Sen. Ron Wyden, D-Ore., last week delayed any confirmation vote on President Bush's appointment of Deborah Majoras as new chairman of the Federal Trade Commission and Jon D. Liebowitz as an FTC member. September at the earliest the vote could take place. The move could leave current chairman Timothy Muris in charge until November election results are known.

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