The US drinks group, Constellation Brands, has reached an agreement to acquire the Australian wine company, BRL Hardy, for A$1.9 billion ($1.1 billion).

Constellation is to pay A$10.50 per share for BRL Hardy and will assume $325m in debt. The offer represents a 37% premium to the BRL share price prior to the announcement that Constellation and BRL Hardy were in talks, and was higher than had been expected. Analysts had predicted an offer closer to A$9.50 a share.

BRL shareholders will be able to choose whether they receive cash, shares, or a combination of the two. Constellation, which is planning to list its shares in Australia, expects to complete the deal by early-April.

The size of the offer should mean that counterbids, about which there had been significant speculation, now seem unlikely. "We don't expect any other bidders to come in at that price," Constellation's CEO, Richard Sands, said.

The deal not only gives Constellation a significant presence in the Australian wine market but also an entry in the Australian wine export market including a substantial foothold in the UK. The merged company will have sales of $1.7 billion which in value terms will make it the largest winery in the world, ahead of E&J Gallo Winery, though Gallo is still expected to be the world's largest wine producer in terms of volume.