(Wines&Vines) - About a year after most assumed that Treasury Wine Estates (TWE) would be subject to an acquisition bid, the Australian wine company has turned around and is buying most of Diageo’s wine operations.

Diageo, the British drinks giant, has agreed to sell most of its U.S.-based Chateau and Estate Wines division—along with the U.K.-based Percy Fox business—to TWE for $552 million. The deal is expected to close around the end of the year and includes $48 million in capitalized leases.   

“Wine is no longer core to Diageo, and this sale gives us greater focus,” Diageo CEO Ivan Menezes said today in a news release announcing the deal. “With the completion of this transaction, Diageo will have released £1 billion ($1.5 billion) from the sale of non-core assets since the start of the financial year.”

 Headquartered in Napa, Calif., Diageo Chateau and Estate Wines includes Beaulieu Vineyard, Chalone Vineyard, Acacia Vineyard, Provenance Vineyards, Rosenblum Cellars and Sterling Vineyards.

Diageo is keeping Chalone and Acacia, while the other properties would be assumed by TWE, which owns Beringer Vineyards, Chateau St. Jean, Etude Wines, St. Clement Vineyards and Stags’ Leap Winery. TWE Americas operations also are based in Napa.

TWE gains Blossom Hill, which is one of largest California wine brands in the U.K. 

TWE had been the subject of buyout rumors since 2013, and two competing U.S. private equity groups tried to buy the company in September 2014. Their offers of around $3 billion, however, weren’t enough to convince CEO Michael Clark and shareholders to sell.

 Clark’s plan for TWE has been to improve sales through its premium brands such as Beringer. The company just recently sold its sprawling Asti Winery and 275 acres of vineyards to E. & J. Gallo Winery for an undisclosed price.