Friday May 9, 11:53 AM
Diageo to reorganise Irish brewing operations
LONDON (ShareCast) - Guinness brewer Diageo (LSE: DGE.L - news) is to invest in new brewing facilities in Ireland and close down two
smaller breweries at Kilkenny and Dundalk.Diageo will invest £520m over a five year period starting next year to renovate the St. James's Gate brewery and to build a new multi-product brewery close to Dublin. The renovated St. James's Gate brewery will brew Guinness, primarily for the Irish and British markets, while the new brewery will brew ales and lagers for the Irish market, as well as Guinness for markets outside of Britain and Ireland. Once the new brewery is commissioned in five years time production from the Kilkenny and Dundalk breweries will be transferred and those breweries will be closed down, resulting in around 250 redundancies. Diageo expects there will be a one time cash cost of around £120m relating to the reorganisation of its brewing operations which will be treated as an exceptional cost mainly in respect of the current fiscal year, which ends in June. The reorganisation will result in the release of surplus land between 2013 and 2015 on parts of the St. James's site as well as in Kilkenny and Dundalk. The estimated value of this land at current prices is about £400m.
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