E & J Gallo Winery (Gallo) has acquired Napa Valley’s Bordeaux-style wines producer Pahlmeyer Winery to fuel growth in luxury markets.

The deal includes both Pahlmeyer and Jayson by Pahlmeyer wine brands and inventory.

However, Waters Ranch, Pahlmeyer’s 55-acre estate vineyard on Atlas Peak, is not part of the deal.

Furthermore, Gallo signed an initial four-year lease agreement to buy grapes from Pahlmeyer.

Commenting on the deal, Pahlmeyer Winery founder Jayson Pahlmeyer said: “I am thrilled to transition ownership of Pahlmeyer Winery to the Gallo Family.

“The two companies share similar principles and, with Gallo’s long-standing commitment to quality, I am confident they will take Pahlmeyer to even greater heights in the future.”

Gallo, as part of the agreement, also get rights to operate Jayson tasting room, which opened at Vista Collina Resort in August last year.

Wayfarer brand and Wayfarer Vineyard are not included in the deal and will be managed by Cleo Pahlmeyer.

Gallo Premium Wine Division senior vice-president and general manager Roger Nabedian said: “Jayson Pahlmeyer’s passion for wine is evident in everything he’s done. We are thrilled to continue working with both Jayson and his daughter Cleo as we incorporate the esteemed Pahlmeyer brands into our luxury portfolio.

“Pahlmeyer complements our portfolio nicely, allowing Gallo to continue competing in luxury wine and fueling strategic growth for the company.”

For the deal, Zepponi & Company served as the exclusive financial advisor to Pahlmeyer Winery.

In March 2017, E. & J. Gallo Winery agreed to acquire Stagecoach Vineyard in Napa Valley, California.

Situated in the Pritchard Hill region and the Atlas Peak appellation, Stagecoach Vineyard was founded by Jan Krupp and features a wide range of soil depths, types and microclimates ideal for grape growing.