US wholesalers to merge in $12bn mega deal

Two of the biggest alcohol wholesalers in the US – Republic National Distributing Co. (RNDC) and Breakthru Beverage Group – are preparing to merge, creating a US$12 billion company.

RNDC, a distributor and broker of premium wine and spirits, and Breakthru Beverage Group, a distributor and broker of beer, wine and spirits in the US and Canada, are both members of the Forbes list of “America’s Largest Private Companies”.

Yesterday, the two companies announced that they had signed a letter of intent to combine their assets and operations, which they say will allow “greater focus on innovation and differentiation”.

“The merger of RNDC and Breakthru will create strategic opportunities that will benefit our associates and our business partners in a rapidly changing and highly competitive marketplace. Much more than a growth opportunity, we are entering this venture to create something that is different, sustainable and transformative,” said RNDC president and CEO Tom Cole.

“Together, our deep bench of focused, diverse associates will bring great and unique advantages to our suppliers, our customers and the consumers who enjoy the products we represent.”

RNDC distributes premium wine and spirits across the US and employs more than 9,500 people nationwide. Breakthru meanwhile is the result of the 2015 merger between Wirtz Beverage Group and Charmer Sunbelt Group, and is the leading North American beverage wholesaler with 7,000 employees and distribution operations across the US and Canada.

“Breakthru looks forward to joining forces with RNDC to establish an even stronger foundation of industry knowledge, talent, history and heritage,” added Breakthru Beverage Group president and CEO Greg Baird. “We see this as the launch pad to bring innovation to life and to usher in a new era for our business and industry.”

“Across North America, the combined company of RNDC and Breakthru will benefit from a broadly expanded footprint, a passionate and creative team, and an uncompromising commitment to providing innovation, value and service to all our stakeholders.”

Together, the company will control the distribution of spirits brands including Beam Suntory, Brown-Forman, Diageo, Edrington, Moët Hennessy, Pernod Ricard, Proximo, Rémy Cointreau, Sazerac, Tito’s and William Grant & Sons in the US. In wine, leading suppliers include Banfi, Constellation, Gallo, Jackson Family Wines, Kobrand, Ste. Michelle, Trinchero and The Wine Group, while their combined beer portfolio will include Heineken, MillerCoors and a number of craft brewers.

Under the terms, Tom Cole, president and CEO of RNDC, will serve as CEO of the consolidated company, while RNDC’s Bob Hendrickson would act as its chief operating officer. Danny Wirtz, currently vice-chairman of Breakthru, would become its chief growth and strategy office, and Greg Baird, president and CEO of Breakthru, would assume the role of chief integration officer.

The deal, which is subject to regulatory approval, is scheduled to be completed in the second quarter of 2018.