Woodinville, WA -- Ste. Michelle Wine Estates, Washington's oldest and most acclaimed wine company, and Dick Erath, pioneering Willamette Valley grape grower and winemaker, announced that Ste. Michelle would acquire Erath Winery's assets effective July 1, 2006.

The sales agreement includes the Dundee, Oregon-based winery, the Erath brand name, its inventory and the long-term contracts for all Oregon grapes grown by Dick Erath, who will continue to farm seven signature vineyards in the Dundee Hills, including Erath Estate Vineyards. Terms of the sales agreement were not disclosed.

As part of the sales agreement, initial funding will be provided for a charitable foundation to advance viticultural and enological science and education in Oregon.

Ste. Michelle Wine Estates President and CEO Ted Baseler said Ste. Michelle has long been interested in Oregon and has respected Oregon's role in elevating the prestige of the entire Northwest wine industry here and abroad.

That interest, as well as Ste. Michelle's relationship with Dick Erath, was honed when the two first worked together during the 1980s when Ste. Michelle exported Erath wines.

"We have admired Dick Erath's work for many years, and we are very excited that this premier Oregon winery will be a complement to the other Northwest wineries in our portfolio," Baseler said.

"For nearly 40 years Dick has dedicated himself to leading Oregon to become the birthplace of New World Pinot Noir, and we are privileged to join this great community," Baseler said.

Erath is considered a "Pinot Pioneer" and is known to be among the first to recognize the grape-growing potential of the Willamette Valley. He focused on introducing contemporary grape growing practices in the state and was one of several Oregon winemakers to secure importation of French clones into Oregon.

Today, Erath is the No. 1 Pinot Noir producer in Oregon, and both the variety and the state have enjoyed strong growth in recent years.

Erath considers the sales agreement a "great outcome" for the Oregon wine industry. "I was particular about who I would have purchase the winery," Erath said. "Of course, it had to be someone committed to making quality wine, but also someone who would be a good steward of the land and a good citizen of this community."

Ste. Michelle is the acknowledged leader of the Washington wine industry, and in that capacity has worked to raise awareness and regard for all wineries by contributing several million dollars to support the state's wine programs, research projects and charitable organizations.

"This will be a new chapter for Erath Winery," said Dave Adelsheim of Adelsheim Vineyard Winery in Newberg, Oregon, "but it's great to have Ste. Michelle, which already is part of the Northwest wine community, join our industry."

As for Erath's future, Baseler says he likes what Dick Erath has created and sees no big changes in the foreseeable future.

"Our goal is to expand upon what Dick already has done with this wonderful winery," Baseler said of the purchase, which is subject to completing regulatory approvals required for the transition.

Announcement of the Erath sales agreement follows the April announcement of the historic, strategic alliance formed by Ste. Michelle Wine Estates and the Antinori family of Italy to exclusively distribute Antinori's acclaimed wines in the United States.