June 23 (Bloomberg) -- Molson Coors Brewing Co. President and Chief Executive Officer Peter Swinburn said the company is willing to take on more debt for an acquisition of “reasonable” size, should the opportunity arise.

“We’re willing to leverage up on any deal that we think is attractive and gives us a return,” Swinburn said in an interview yesterday at the brewer’s headquarters in Denver. “We’ve got capacity to make certain acquisitions.”

Molson Coors, which makes Blue Moon beer, could also sell shares to help fund a purchase, he said. The company, which raised its quarterly dividend last month, had $1.57 billion of long-term debt as of March 29 and forecasts free cash flow exceeding $500 million this year. It has $300 million of 4.85 percent bonds coming due in September 2010.

Molson Coors, the biggest brewer based in North America, was created in a $3.4 billion merger between Adolph Coors Co. and Canada’s Molson Inc. in 2005. The brewer’s international expansion has focused on bolstering sales of Coors Light in Asia, western Europe and Latin America. The brand sells at a higher profit margin in some overseas markets. Swinburn said he’d consider any purchase that reinforces existing operations.

Swinburn declined to specify the size of a potential acquisition, particular companies that could be targets, or whether he is considering any deals now.

Cobra Beer

Molson Coors completed its purchase of a majority stake in U.K.-based Cobra Beer Ltd. earlier this month, said Dan Lewis, a spokesman for Molson Coors. The acquisition gives Coors Light access to delivery trucks and a sales force servicing 20,000 Indian restaurants where Cobra is sold, Rob Borland, chief marketing officer for global brand and market development, said in an interview yesterday.

Molson Coors advanced 10 cents to $42.11 at 4:03 p.m. in New York Stock Exchange composite trading. The shares have dropped 14 percent this year.

Swinburn also said Molson Coors hasn’t been approached about Anheuser-Busch InBev NV’s operations in eastern Europe.

The assets, which include the Czech Staropramen brand and breweries in Hungary, Bulgaria and Romania, may be the subject of bids by several private-equity firms, three people close to the talks said earlier this month. Anheuser-Busch InBev is the world’s biggest brewer.

Molson Coors, which doesn’t own any breweries in eastern Europe, would have a hard time finding enough cost savings to justify an acquisition there, Swinburn said.

“If and when we are approached, we’ll see what is available, but obviously, like all acquisitions, we’d be pretty cautious,” Swinburn said.

To contact the reporter on this story: Duane D. Stanford in Atlanta at dstanford2@bloomberg.net.

Last Updated: June 23, 2009 16:15 EDT