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Breakthru and RNDC to create US$12bn company
Consolidation in the US drinks industry is set to intensify as Breakthru Beverage Group and Republic National Distributing Company (RNDC) propose a merger that would see the creation of a US$12 billion company.
RNDC plans to merge its business with Breakthru Beverage Group
RNDC distributes premium wine and spirits across the US, employing more than 9,500 people nationwide.
Breakthru, itself the result of the 2015 merger between Wirtz Beverage Group and Charmer Sunbelt Group, is the leading North American beverage wholesaler with 7,000 employees. It has distribution operations across the US and Canada.
Both companies, the second and third largest drinks distribution firms in the US, feature on Forbes’ list of America’s Largest Private Companies.
Republic and Breakthru have signed a letter of intent to combine their assets and operations, which they claim will allow “greater focus on innovation and differentiation”.
The deal, which is subject to regulatory approval, is expected to be completed in the second calendar quarter of 2018.
Breakthru Beverage Group was formed in 2015 as a result of another mega-merger
Under the terms, Tom Cole, president and CEO of RNDC, would 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 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,” said Tom Cole.
“Much more than a growth opportunity, we are entering this venture to create something that is different, sustainable and transformative.
“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.”
The merger will allow RNDC and Breakthru to “expand their footprints and to become more competitive and responsive to the marketplace”, according to a statement from both companies.
Following the merger, RNDC and Breakthru plan to invest in technologies that will “enhance all areas of their business”, including supply chain management, e-commerce, digital marketing and operational efficiency.