Molson Inc. and Adolph Coors Co. said today they have agreed to combine forces in a merger of equals that values each company at about US$3 billion.

The deal will create a new company, to be called Molson Coors Brewing Co., that will be the world’s fifth-largest brewing company by volume,

However, according to a report in the Wall Street Journal Ian Molson plans to offer up to US$4 billion to acquire Molson, potentially thwarting a deal between the two brewers and escalating a feud between Ian Molson and his cousin, chairman Eric Molson.

North American markets are expected to slip at the open Thursday, a day after U.S. markets took a drubbing led by technology shares.

With mixed signals so far, investors are looking to Microsoft to report strong earnings after the bell and give positive guidance about the second half of the year.

In this morning’s economic news, U.S. initial jobless claims fell by 11,000 last week, bucking forecasts for a modest increase.

The Labor Department said the four-week average, which smooths out weekly fluctuations, declined by 2,500 to 336,750.

There are no major economic releases from Statistics Canada this morning.

European bourses are lower at midday. London’s FTSE 100 is off 61.70 points, or 1.4%, at 4,315.60 and Frankfurt’s DAX is down 65.96, or 1.7%, at 3,811.52.

Overnight in Asia, Tokyo’s Nikkei closed down 148.82, or 1.3%, at 11,285.04 and Hong Kong’s Hang Seng lost 74.90 points to close at 12,320.21.

Toronto’s main index was the only North American market gauge to finish in the black today as U.S. stocks plummeted on investor worries about slow growth and uncertain corporate profits.

The S&P/TSX composite index rose 35.61 points to 8,454.15.

On Wall Street, the tech-heavy Nasdaq composite index fell 42.70 points, or 2.23%, to 1,874.37, while the Dow Jones industrial average dropped 102.94 points, or 1.01%, to close at 10,046.13.

The S&P 500 lost 14.79 points, or 1.33%, to 1,093.89.