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Breakthru Makes Offer For Empire Amid Controversy

November 11, 2016

Breakthru Beverage Group has made an offer to acquire New York’s Empire Merchants, in a blockbuster move that would make Breakthru the U.S. market’s second-largest spirits and wine distributor. 

Earlier today, Breakthru co-chairmen Rocky Wirtz and Charlie Merinoff, as well as vice chairman Danny Wirtz and CEO Greg Baird, sent a memo to Breakthru employees informing them that the company has made a bid for Empire Merchants. Empire is New York’s biggest distributor, with annual sales of around $2 billion, according to Shanken’s Impact Newsletter.

Breakthru is making the play amid a swirl of controversy between itself and Empire. In September, Empire sued Merinoff—a part-owner in both Empire and Breakthru—and Baird, saying the two executives defrauded the Brooklyn-based Empire through their involvement in an interstate smuggling scheme. Breakthru has vociferously denied the allegations and in recent days has prepared to file a motion to dismiss the complaint.

Breakthru was formed earlier this year when Wirtz Beverage Group joined forces with Charmer Sunbelt Group, in which Merinoff was a part-owner. At the time, Empire—co-owned by the Merinoff/Drucker and Magliocco families—remained independent instead of becoming part of Breakthru.

A combination of Breakthru and Empire would create a distribution giant with revenue in excess of $7 billion, putting it just ahead of current number-two player Republic National Distributing Co. Southern Glazer’s, also formed earlier this year, is the top distributor, with revenue exceeding $16 billion. —Peter Zwiebach

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