US-based premium wine and spirit distributor and broker Republic National Distributing Company (RNDC) and Breakthru Beverage Group (BBG) have executed a Letter of Intent (LoI) to combine their assets and operations.

BBG operates as a distributor and broker of beer, wine and spirits in North America.

BBG president and CEO Greg Baird said: “Breakthru looks forward to joining forces with RNDC to establish an even stronger foundation of industry knowledge, talent, history and heritage.

“We are entering this venture to create something that is different, sustainable and transformative.”

“We see this as the launch pad to bring innovation to life and to usher in a new era for our business and industry.”

The merger of the two alcoholic beverage companies is expected to create a $12bn company in the US drinks industry.

The deal is expected to close in the second quarter of next year, subject to regulatory approvals and other customary closing conditions.

RNDC president and CEO Tom Cole said: “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.

“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.”

With the proposal, RNDC and BBG intend to further enhance their footprints and to become more responsive to the marketplace by recognising the best practices and efficiencies of each business.

The proposed merger is also expected to facilitate investments in technology and further enhance all the aspects of their business, including supply chain management, customer and supplier connectivity.