The deal is valued at $238 million (£146 million) and is expected to be complete by April, pending regulatory approval.
The Chilean company will also be acquiring 429 hectares of vineyards owned and leased in Mendocino County, cellars with capacities of 36 million litres and a bottling facility. The organic brand Bonterra is included in the sale.
Fetzer’s off-trade sales in the UK off-trade were worth around £5 million in the year to January 21, according to Nielsen, but experienced a decline of 13%.
Eduardo Guilisasti, chief executive of Concha y Toro, described the deal as “the largest transaction of this type in the company’s history”.
Brown-Forman chief executive Paul Varga said, “Fetzer and Bonterra have been wonderful brands for Brown-Forman over the years, but as our company has grown globally and our portfolio strategy has evolved, we believe refocusing our resources on what we deem to be our best opportunities for strong growth will provide superior shareholder returns over the long term.”