Brazil, Sao Paulo: Brazil's Companhia de Bebidas das Americas (AmBev), said on March 31 it will spend C$81 million to close a Toronto brewery acquired last year when it joined forces with Belgium's Interbrew to create Inbev, the largest beer seller by volume in the world. According to Dow Jones Newswires , as part of the $11 billion Inbev deal, AmBev sold Interbrew more than half its stock and gained control of Canadian brewer Labatt and its U.S. distribution network.

In a Thursday filing with Brazil's securities regulator, AmBev said it has decided to halt operations on Nov. 4 at a plant in Toronto that had the annual capacity to brew 2.4 million hectoliters of beer. The plant will be closed by the end of this year. "The decision was based on the current unused production capacity at Labatt, particularly in central Canada," the company said.

AmBev will lay off 265 workers, who will be offered severance packages. New jobs will be created at Labatt's plant in London and also in the province of Ontario. Toronto is Ontario's capital.

AmBev said it will invest C$20 million this year and C$11 million next year to transfer the production capacity lost in Toronto to other plants. Those investments make up part of the total C$81 million AmBev expects to spend.

AmBev said it expects to show annual cost savings of C$18 million and an annual reduction in investment spending of C$6 million as a result of closing the plant.

The decision comes just a few days after Inbev announced that it will start brewing AmBev's Brahma brand in Russia and Belgium and start selling it in Russian, European, Canadian and U.S. markets.