May 9, 2008 - Dublin, Ireland--Diageo PLC announced Friday that it will invest 650 million euros (US$1 billion) to upgrade and consolidate its Guinness brewing operations in Ireland.

The plan calls for upgrading the St. James's Gate brewery in Dublin, building a second brewery near Dublin and closing breweries in Kilkenny and Dundalk.

The Kilkenny and Dundalk facilities are marked for closure in 2013, the project completion date for the new brewery near Dublin.

Diageo said the Waterford brewery will be streamlined and downsized, but the Belfast packaging facility will not affected, the company said.

The company said the reorganization would reduce brewery employment from 800 to 550.

The reorganization would reduce employment by 250, the company said, and it earmarked 150 million euros (US$230 million) in addition to the capital investment to deal with the reduction in jobs.

The updated St. James's Gate brewery will produce Guinness primarily for the Irish and British markets, Diageo said, and will be further developed as a tourist attraction.

The new brewery will be Ireland's largest, concentrating on production of Guinness for export and the production of ales and lagers, the company said.

Diageo said the plans would free up land in Dublin, Kilkenny and Dundalk valued at approximately 500 million euros (US$770 million) for redevelopment.

Diageo shares were down 0.1 percent at 1,027 pence (US$20.77; 13.06 euros) on the London Stock Exchange.