Commentary: Will This Merger Go Down Smoothly?

With the Feb. 1 vote by Adolph Coors Co. (RKY ) shareholders to approve the merger with Molson Inc., the extended courtship between the two companies came to an end. But the hard work of making the merger succeed is just beginning. The company's new heft is supposed to give it more muscle to deal with the shrinking market share in its two home markets and a more competitive global beer industry. Rapid consolidation, combined with the growing threat of wine and spirits, has made it difficult for smaller players to make it on their own. Nevertheless, the terms of the deal may saddle the new company with major management problems. The two family-dominated partners structured it as a merger of equals. In the executive suite and the boardroom, that means neither side is clearly in charge. Such co-leadership structures seldom work. And family control of both companies -- with all the history, pride, and expectations this implies -- creates additional complications.

On paper, the deal looks like a smart move. Molson Coors Brewing Co. will be the world's fifth-largest brewer, with $6 billion in sales. While that's not enough clout to go head-on with goliaths Anheuser-Busch Cos. (BUD ) and InBev (ABV ), it does reduce the risk. Coors Light accounted for half of Adolph Coors's earnings; for Molson Coors, that brand's bottom-line impact is about 20%. "The merger doesn't fix the company's core problems," says Marc I. Cohen, an analyst at Goldman, Sachs & Co. (GS ) "But it makes each of the problems they face less significant."