California wine giant E&J Gallo has taken another step in an apparent quest to revamp its business after agreeing to buy estate wine specialist Talbott Vineyards.

Talbott is based in California’s Central Coast, in the Santa Lucia Highlands AVA, is one of the US sunshine state’s biggest producers of estate grown wine, said Gallo. It did not disclose a price for the deal.

The move is the latest in a series of vineyard purchases by Gallo and suggests the company is seeking to re-orient its business towards the more premium end of the wine market.

Some rivals, such as Mondavi owner Constellation Brands, have been doing the same, believing there is a bigger sales opportunity there.

Talbott was founded in 1982 by Rob Talbott and it specialises in the classic Burgundian varieties of Chardonnay and Pinot Noir.

‘After more than 33 years dedicating my life to the establishment and growth of Talbott Vineyards, I am pleased to transition ownership of our wonderful company to E&J Gallo,’ Talbott said.

As part of the deal, Gallo will get the Talbott brand and the 227 hectare Sleepy Hollow vineyard. It will also continue to operate the Camel Valley tasting rooms, it said.

‘As this region’s unique characteristics become more widely known, we see a great future for Talbott Vineyards as part of our fine wine portfolio,’ said Roger Nabedian, senior vice president and general manager of Gallo’s premium wine division.

The deal is expected to complete on 4 September.