Seattle-based Jones Soda has announced it will merge with Reed’s Inc. of Los Angeles.

Reed’s, known for its presence in natural foods stores, and Jones, known for its quirky and irreverent flavors, have signed a letter of intent to merge, with Reed’s becoming the corporate survivor, according to a Business Wire report this morning.

The announcement by both companies said the deal offers ”the opportunity to realize the potential benefits of increased size and scale, as well as cost efficiencies in several aspects of the combined business, including administration, operations, and customer interface.”

In the proposal, Reed’s would acquire Jones Soda for a combination of cash and common stock.

Rick Eiswirth, board chairman of Jones Soda Co., said, “Over the past year we have taken numerous steps to reduce our expenses and reinvigorate our top line in order to return to profitability. Unfortunately, the challenging economic environment combined with our current capitalization has made it extremely difficult to operate on a standalone basis.”

Jones Soda also announced that CEO Joth Ricci will leave effective April 2 “to pursue other business opportunities.”

Under the binding provisions of the letter of intent, Reed’s and Jones Soda have until April 5 to negotiate a definitive agreement. The transaction would also be subject to approval of the shareholders of both Jones Soda and Reed’s.

Just before noon today, Jones Soda stock (JSDA) was trading down 29 cents, or 34.52 percent, according to Bloomberg News. Reed stock (REED) was trading up 16 cents, or 10.1 percent, to $1.74