Australian Wine Giant Buys California Cult Favorite Daou for $1 Billion to Crack U.S. Premium Market

Australian wine company Treasury Wine Estates (TWE) acquired California's Daou Vineyards for $1 billion to expand into the U.S. premium wine market.

Daou was founded by two Lebanese American brothers who started making wine in their garage before growing it into a 400-acre vineyard.

TWE sees pricier, higher-quality wines as the future of its business as U.S. consumers gain interest in wine.

The deal includes $900 million upfront and $100 million more if performance targets are met.

TWE hopes to expand Daou internationally after China imposed huge tariffs on Australian wine imports, decimating exports.