Home of Guinness to produce lager

James Joyce will be spinning in his grave – Dublin's historic St James's Gate brewery, home of the author's famously beloved Guinness, is to start brewing fizzy foreign lagers like Budweiser and Carlsberg.

The drinks giant Diageo yesterday announced it was investing €153m (£128m) in the famous brewery in a move that will see it extended to take over the beers currently made in plants at Kilkenny and Dundalk, which are to be closed in 2013.

The move marks a spectacular turnaround in the fortunes of St James's Gate, which at the top of the Irish property boom in 2007 looked set to be closed and sold to redevelopers.

The property market crash changed Diageo's mind somewhat, while the state of the Irish economy appears to be behind a decision to mothball plans for a "superbrewery" of the lagers and Smithwick's ale in nearby County Kildare.

A new brewhouse will now be built at St James's Gate, providing around 300 much-needed construction jobs for the city.

St James's Gate has been brewing Guinness since 1759 and is currently Europe's second-biggest brewery, making all the black stuff sold and drunk across Europe and the US.