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New West Daily Roundup for July 28, 2016

Today in New West news: Molson Coors shares tumble, Wyoming to research clean coal with Japan’s Coal Energy Center, and group of Utah doctors to sue “Diesel Brothers.”

There have been big rumbles in the global beer market over the past few months, which started when Belgium-based Anheuser-Busch InBev NV announced their intention to purchase SABMiller plc—which would give Denver- and Montreal-based Molson Coors control of the U.S. business. However, with both companies tripping over apparent hurdles in the deal, Coors shares have suffered.

According to the Denver Business Journal, citing a report from Bloomberg, shares tumbled after the companies announced they were suspending their merger for the time being, “potentially throwing the industry’s biggest deal ever into disarray.” From the Journal:

Bloomberg said it had reviewed an internal memo from SABMiller CEO Alan Clark to employees, asking them to stop work on plans to consolidate the two companies, adding that “there should be no contact with AB InBev with immediate effect.”

The two companies declined to comment.

If the deal — referred to in the industry as “Megabrew” — were to fall apart, Molson Coors presumably would be left with its current 42 percent stake in MillerCoors. But Bloomberg cited sources as saying that SABMiller has not yet decided to kill the deal. Molson Coors also declined to comment on Bloomberg’s report.

The latest reports come a day after AB InBev — maker of Budweiser beer — sweetened its cash offer for London-based SABMiller to about $59.12 a share from the previous $57.80 to compensate for the decline in value of the British pound in the wake of the United Kingdom’s “Brexit” vote to leave the European Union.

Previously, some SABMiller shareholders — who still must approve the merger — had complained that with the pound’s decline, they would be coming out worse in the acquisition than the company’s biggest shareholders — tobacco company Altria Group Inc. and BevCo Ltd., representing the Santo Domingo family of Colombia — who were offered a separate, euro-based deal less affected by the pound’s value.

News reports say SABMiller’s board is reviewing AB InBev’s improved offer.

The two companies have cleared most of the regulatory hurdles they face in the U.S., Europe and South America regarding the acquisition, with a decision by Chinese officials still to come. The Justice Department signed off on the merger last week.

As an offshoot of the proposed merger, Molson Coors agreed to pay $12 billion for SABMiller’s 58 percent stake in MillerCoors. SABMiller agreed to sell off its majority stake in MillerCoors to satisfy regulators’ concerns that the combined company would have too big a share of the U.S. beer market.

Over in Wyoming, Governor Matt Mead recently signed a deal in conjunction with Osamu Tsukamoto, president of the Japan Coal Energy Center (JCOAL), to research “clean coal” and other coal trade technologies. According to the Wyoming Business Report, the Memorandum of Understanding (MOU) signed by Mead and Tsukamoto covers “technical cooperation, research and development, communication and information exchange and facilitating coal exports and sales.” Under the MOU, available here, the JCOAL will work with the University of Wyoming, Wyoming Infrasturcture Authority, and the Wyoming Business Council. The deal mentions no exchange of funds. From the WBR:

“Japan is a leader in clean-coal power. Japan is looking to diversify its coal resources supply chain,” said Governor Mead. “I am excited to partner with JCOAL and their member businesses to developing carbon solutions for the benefit of the world and in exploring ways to ship Wyoming’s coal to Japan. This partnership has great promise for Wyoming.”


Mead expects to host a conference in Wyoming within a year to facilitate work between Japanese researchers and researchers from the University of Wyoming’s School of Energy Resources.

Wyoming, the largest coal producing state, is looking for ways to keep the state’s coal industry working even as the country moves further toward a low carbon economy. In April, Gov. Mead broke ground on a $21 million carbon test center that is being built next to Basin Electric Power Cooperative’s Dry Fork Station south of Gillette.

One of the goals of the new research center would be to find ways to make coal a cleaner burning fuel, reducing its environmental damage, which would help drive demand for exports.

“As we find solutions for Wyoming, the country and the world for coal, which is what we’re to do here, it certainly makes the lift for getting ports open in places like the State of Washington easier when we can point to it and say, ‘we’re not just making this ask, we actually are doing the heavy lifting in terms of trying to find solutions for coal,’” Mead told the Associated Press.

Finally, down in Utah, according to the Salt Lake Tribune, Utah Physicians for a Healthy Environment are planning to sue the The Diesel Brothers, of the Discovery Channel show “Diesel Brothers.” The group alleges that the brothers (who outfit and drive pickup trucks, showing viewers the ins-and-outs of the vehicles along the way) are deliberately modifying their vehicles’ pollution control systems to cheat emission standards—which is illegal. From the Tribune:

Brian Moench, president of Utah Physicians for a Health Environment, said his organization has been aware since 2007 that some local auto shops specialize in defeating automobile emissions systems, he said.

“We got a number of complaints from citizens about ‘coal rollers’ — some of these people who do this to enjoy the notoriety of putting a big black cloud of smoke over other motorists and pedestrians,” Moench said.

Moench said Utah Physicians has discovered online videos in which the Diesel Brothers — also featured on a Discovery Channel reality TV show of the same name — demonstrate what appear to be modified pollution control systems. The group, he said, also found videos in which the Diesel Brothers appear to demonstrate how diesel vehicles can be modified to bypass their emissions controls, and to advertise repair kits intended to facilitate these modifications.

Attempts to reach any of the Diesel Brothers for comment Wednesday were unsuccessful. In a December 2015 Facebook post, one of the Diesel Brothers said their videos were not about “rolling coal” — i.e., disabling emissions systems in order to produce a visible discharge of diesel smoke — and were not intended to irritate environmental regulators.

Moench said the Davis County Health Department later tested a vehicle modified by the Diesel Brothers and confirmed that it released significantly more pollution than an unmodified vehicle.

In a statement, Dennis Keith, manager of the Davis County Health Department’s Air Quality Bureau, confirmed that the health department had tested a modified diesel vehicle, but was unaware of any intended lawsuit. The allegations made by Utah Physicians, he said, “are very concerning to the Davis County Health Department.”

“Tampered vehicles can have a very harmful effect on our air,” he said in the statement. “These tampered vehicles are illegal and should not pass a Davis County emission test.”

However, Keith said the businesses named in the lawsuit weren’t permitted to conduct emissions tests, and therefore fell outside the jurisdiction of the health department.

The ultimate aim, Moench told the Tribune, is not only to stop the brothers from further modifying trucks, but also to (hopefully) recall some cars the brothers have already modified. “We feel like they have a responsibility to undo what they have done,” Moench said, “and that they should take back all the vehicles that they have modified and make them legal again.”

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