Avenue Vine

The company's annual capacity would initially rise by around 1.6m barrels, increasing to over 2m barrels after investment in the site.

While Boston Beer said it is aware that the brewery will require "substantial investment and renovation", although the actual amount needed to bring the brewery up to speed is "impossible to evaluate".

As part of the deal, Diageo and Boston Beer have agreed that the latter will continue to produce Diageo's products on Diageo's request after the sale is final. Boston Beer's purchase of the brewery includes retaining approximately 194 jobs.

"Our decision to purchase this brewery, rather than build a new brewery in Freetown, was a difficult and complex one," said Martin Roper, Boston Beer's president and CEO. "A combination of rapidly escalating steel and copper costs, increased costs of European brewing equipment caused by the reduced value of the dollar, as well as other construction and production costs and our own growth, recently led us to look again at other existing breweries that we might be able to buy. Comparing the projected construction costs of a new brewery against the price of buying and renovating the Pennsylvania brewery, leads us to believe that this is the better long-term strategic decision for the company."

"We are able to secure twice the brewing capacity for less than half the cost of building the Freetown, Massachusetts brewery. If our due diligence in Pennsylvania and discussions with local government and infrastructure suppliers proceeds acceptably, we will not be proceeding with the Freetown project."

Earlier this year, Boston Beer signed an agreement with a subsidiary of City Brewing to brew its Samuel Adams beers at the former Rolling ROck brewery in Latrobe, Pennsylvania. City Brewing purchased the brewery from InBev in September last year.

About Diageo:
The world's largest wine & spirit group, Diageo was formed in December 1997 through the merger of GrandMet and Guinness. At the time of the merger Diageo was a broad-based consumer goods company, with food and drinks at its core. Since then the company has sold off its Pillsbury and Burger King divisions and a stake in General Mills to realign its business behind premium drinks.

In December 2001, the company partnered with French group Pernod Ricard to acquire the Seagram drinks business. It now owns 17 of the top 100 premium spirits brands in the world. These include Smirnoff, the world’s number one premium vodka, Johnnie Walker and J&B, the global number one and two Scotch whiskies respectively. Guinness, the world’s leading stout. Baileys, now the world’s top selling liqueur. Captain Morgan, the number two rum, José Cuervo, number one Tequila. And Tanqueray, a leading premium gin in the US.

About InBev:
InBev was formed in 2004 when Interbrew and Companhia de Bebidas das Américas (AmBev) combined to create what is now the world's leading brewer by volume.

As of June 2005, InBev has a global market share of close to 14%, in a balanced mix of developed and growth markets. The company is the No. 1 brewer in the world by volume, selling 205 million hectoliters (hl) of beer and 30m hl of soft drinks annually (pro forma figure for InBev plus AmBev).

InBev is a true global brewer, with leading positions in the Americas, Europe and Asia, and is ranked No. 1 or No. 2 in over 20 key beer markets around the world - more than any other.

InBev is a publicly traded company headquartered in Belgium, and its origins date back to 1366. InBev's strategy is to continue to strengthen its significant positions in the world's major beer markets through organic growth, world-class efficiency, targeted acquisitions, and by putting its consumers first.

BOSTON, MA--August 5, 2007