UPDATE 1-UST to acquire Stag's Leap wine in joint venture

(Adds details on wine business, joint venture, changes dateline from NEW YORK)

CHICAGO, July 31 (Reuters) - UST Inc. UST.N on Tuesday said its Ste. Michelle Wine Estates unit will acquire wine maker Stag's Leap Wine Cellars in a joint venture that will pay $185 million for the company and its vineyards.

Ste. Michelle will own 85 percent of the joint venture with privately held Marchesi Antinori, a UST spokesman said. UST already distributes Antinori wine in the United States.

The acquisition, while small, adds to UST's commitment to its wine business, which represented about 16 percent of UST's sales through the first half of 2007. Only four years ago, the company was deciding whether to keep its wine business.

UST, which also manufactures and markets consumer products such as smokeless tobacco, said it expects to complete the deal for the Napa Valley, California, winery and estate vineyard in September.

UST shares were up 78 cents, or 1.5 percent, at $54.56 in morning trade on the New York Stock Exchange. The stock is down about 6 percent this year compared with a rise of about 4 percent for the Dow Jones tobacco index .DJUSTB.