Costa Coffee to be sold to Coca Cola

flat-white costa coffee

A proposed sale of Costa for £3.9 billion to The Coca-Cola Company

Whitbread PLC the owners of Costa Limited have agreed to sell Costa Coffee to The Coca-Cola Company for £3.9 billion.  Whitbread is focussing on their hotel brand Premier Inn within the UK and Germany.

costa coffee machine
Costa Coffee

Alison Brittain, Whitbread Chief Executive, commented:
“I am delighted that we have agreed the sale of Costa to Coca-Cola for £3.9 billion. This transaction is great news for shareholders as it recognises the strategic value we have developed in the Costa brand and its international growth potential and accelerates the realisation of value for shareholders in cash. The announcement today represents a substantial premium to the value that would have been created through the demerger of the business and we expect to return a significant majority of net proceeds to shareholders.

Whitbread will also reduce debt and make a contribution to its pension fund, which will provide additional headroom for the expansion of Premier Inn. The sale of Costa to Coca-Cola is another successful landmark in the 276-year history of Whitbread. Whitbread acquired Costa in 1995, for £19 million when it had only 39 shops and successfully grew the business to be the UK’s favourite and largest coffee shop company. In more recent years, we have been focused on building Costa into a leading multi-channel, international coffee brand. This
has resulted in this unique strategic opportunity to combine the Costa brand with Coca-Cola’s global scale, product and distribution capabilities. This combination will ensure new product development, continued growth in the UK and more rapid expansion overseas.

flat-white costa coffee
Costa Coffee

James Quincey, Coca-Cola President & CEO, commented:
“Costa gives Coca-Cola new capabilities and expertise in coffee, and our system can create opportunities to grow the Costa brand worldwide. Hot beverages are one of the few remaining segments of the total beverage landscape where Coca-Cola does not have a global brand. Costa
gives us access to this market through a strong coffee platform. I’d like to welcome the team to Coca-Cola and look forward to working with them.”

 

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