Southern Wine & Spirits Of America And Glazer's are to merge to create the largest North American wine and spirits distribution company.

The new company, Southern Glazer's Wine and Spirits, will cover about 90% of the legal drinking age population in the US, the companies said today. Financial details of the deal, which is expected to close in the second quarter, have not been disclosed.

"The combination of two of the wine and spirits industry's leading distributors will create unmatched value for our business partners and position us for broader supplier alignments, which will translate into even greater opportunities for our team members," said Southern's CEO, Wayne Chaplin, who will lead the new venture as chief executive. 

Southern's chairman Harvey Chaplin will take the equivalent post in the new venture, while Glazer's chairman Bennett Glazer will be executive vice chairman. Current Glazer's CEO Shelly Stein will become president.

The transaction is a shake-up for the drinks industry, and comes amid consolidation in North America's three-tier distribution system.

Breakthru Beverage Group, the result of a part-merger between leading alcoholic drinks wholesalers The Charmer Sunbelt Group and Wirtz Beverage, officially started operations as a standalone company at the start of the year. Breakthru, with more than US$6bn in annual sales, will be North America's second-biggest distribution company behind Southern Glazer's.

Today's deal covers most of the two companies' portfolios, however the majority of Glazer's malt beverage distribution business is not included. Also, Glazer's Beer & Beverage unit, the business within Glazer's existing MillerCoors footprint, will operate as a separate company under the continued ownership of the Glazer family. The remainder of Glazer's and Southern's malt beverage businesses will become part of Southern Glazer's.

Southern, which operates in 35 markets, is the biggest US distributor and has been in business since 1968. Glazer's currently operates in 15 states, Canada and the Caribbean.