Drinks Americas Holdings has lined up the acquisition of newly-named Global Beverage Asia.

The US-based drinks company said late last week that it has signed a non-binding letter of intent to buy Global Beverages Asia, the name for the recently-merged Yarraman Winery and China-based wine and spirits distributor Asia Distribution Solutions (ADS) entity.

The acquisition, for an undisclosed amount, is subject to completion of due diligence, the negotiation of definitive agreements, and the satisfaction of legal requirements.

Drinks Americas chairman and CEO Patrick Kenny said: "Consumption of beverages and the size and scale of the distribution and retail market in China is something Drinks Americas wants to be a part of. When we met to discuss and review the strategic opportunity, an immediate vision of the scale and scope of this business opportunity for Drinks began to take shape.

"Assuming a consummation of this acquisition, the entire business enterprise will have more than $20m in current sales, over $40m in net tangible assets, accretive earnings, and a growing business infrastructure capable of efficient international distribution of proprietary products."

Michael Kingshott, ADS' chairman, added: "Drinks Americas has made significant progress in establishing a set of global iconic brands in America. The opportunity to expand and distribute their range of product in addition to those that we already represent in China will create tremendous growth. For the group to access instantly these two markets represents a unique opportunity for growth."

Once the acquistion has been completed, the combined company will operate from offices in New York, London, Sydney, Australia, and Shanghai. Kingshott will join Drinks Americas as chairman, while Kenny will become president and CEO of the combined operations.

ADS is in the process of being acquired by Australian wine company Yarraman, which, together with its Jugiong Vineyard, has the capacity to produce 160,000 cases of wine per year. In addition to Yarraman Wines, the company also sells Ironstone, Santa Carolina, Bass Phillip, Vine San Pedro and La Barcia wines. Yarraman has tangible assets of US$45m.

ADS has Chinese operations in Shanghai, Chengdu, Beijing, and Shenzhen through wholly-owned distributors. The company also sells product in China through its 51%-owned chain of 'big box' or 'WineMall' stores, which ADSL expects to grow to around 50 outlets over the next three years.