Treasury Wine Estates has agreed to acquire Daou Vineyards for up to $1 billion, as it looks to accelerate its focus on luxury wines.

The Penfolds owner said late yesterday that the deal for the Pasa Robles-based business includes an upfront consideration of $900 million, plus an additional earn-out of up to $100 million.

Daou was founded in 2007 by brothers and co-owners Georges and Daniel Daou. It is known for its Cabernet Sauvignon-based Patrimony wine – the 2020 vintage is currently listed for $275 a bottle on the company’s website.

Treasury CEO Tim Ford said: “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 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.”

The deal, which is expected to close by the end of the year, includes the brand, Daou Mountain Estate and hospitality site, four boutique luxury wineries and around 400 acres of vineyards in the Adelaida district of Paso Robles.