Australia-based wine company, Treasury Wine Estates (TWE) announced on Monday that it agreed to purchase the popular California winery, DAOU Vineyards, for up to $1 billion. The deal, which was settled for an upfront consideration of $900 million, plus an additional earn-out of up to $100 million, is expected to be completed by the end of 2023. This monumental purchase will expand TWE’s luxury portfolio, and is expected to drive TWE’s growth in key global markets such as the U.S.

“The U.S. is the world’s largest wine market and we’re beyond thrilled to add DAOU to our portfolio, cementing our position as a global luxury wine leader,” Tim Ford, CEO of Treasury Wine Estates said in a press release. “This is a transformative acquisition that will accelerate the growth of our luxury portfolio globally and paves the way for new luxury consumer experiences.”

DAOU Vineyards was founded in 2007 in California’s Paso Robles region by brothers Georges and Daniel Daou, and has become known for its powerful Cabernet Sauvignon-based wines. The Daou brothers plan to remain involved in the business, with Daniel Daou staying on as the property’s chief winemaker.

TWE, the producer of renowned Australian wine brand Penfolds, saw the opportunity for DAOU’s high-end wines to fill a gap in its existing portfolio, adding to the company’s $20-40 range as well as strengthening its $40+ offerings, according to the release. TWE plans to build on DAOU’s reach in the U.S. and expand sales to international markets.

“DAOU is an award-winning luxury wine business with an outstanding track record for growth and we have grand plans for DAOU to become the next brand with the international scale and luxury credentials of Penfolds,” Ford said. “With DAOU, we will be well-positioned to connect with a new generation of wine lovers, combining tradition with innovation, culture-led experiences, and global distribution.”

This story is a part of VP Pro, our free content platform and newsletter for the drinks industry, covering wine, beer, and liquor — and beyond. Sign up for VP Pro now!