Geometric Multigrid methods have gained widespread acceptance for solving large systems of linear equations, especially for structured grids. One of the challenges in successfully extending these methods to unstructured grids is the problem of generating an appropriate set of coarse grids. The focus of this paper is the development of robust algorithms, both serial and parallel, for generating a sequence of coarse grids from the original unstructured grid. Our algorithms treat the problem of coarse grid construction as an optimization problem that tries to optimize the overall quality of the result- ing fused elements. We solve this problem using the multilevel paradigm that has been very successful in solving the related grid/graph partitioning problem. The parallel formulation of our algorithm incurs a very small communicationoverhead, achieves high degree of concurrency, and maintains the high quality of the coarse grids obtained by the serial algorithm.