Treasury Wines Estates Ltd. shares surged 8% following a settlement with a major US distributor that had exited the California market. The Australian vintner's stock posted its strongest gain in 16 months as the resolution removes uncertainty around its American distribution network.

The distributor's decision to stop operating in California had created significant disruption for Treasury Wines, which relies heavily on the US market for premium wine sales. The settlement addresses the immediate distribution challenges and provides clarity for the company's operations in one of the world's most lucrative wine markets.

Treasury Wines, which owns brands including Penfolds and Beringer, has been working to stabilize its US business amid shifting retail dynamics and changing consumer preferences. The distributor agreement comes as the company seeks to strengthen its position in premium wine segments where it competes with global players like Constellation Brands and E&J Gallo.

Quick Fact: Treasury Wines shares jumped 8% after reaching the settlement.