The acquisition of Costa from parent company Whitbread PLC will give Coca-Cola a strong coffee platform across parts of Europe, Asia Pacific, the Middle East and Africa, with nearly 4,000 retail outlets and the scope for additional expansion, the company said in a statement.
With an aim to gain a strong foothold in the hot beverages segment globally, leading beverages maker Coca-Cola has purchased London’s coffee shop chain Costa Coffee in a mega $5.1 billion deal. The acquisition of Costa from parent company Whitbread PLC will give Coca-Cola a strong coffee platform across parts of Europe, Asia Pacific, the Middle East and Africa, with nearly 4,000 retail outlets and the scope for additional expansion, the company said in a statement. “Hot beverages is one of the few segments of the total beverage landscape where Coca-Cola does not have a global brand. Costa gives us access to this market with a strong coffee platform,” said Coca-Cola President and CEO James Quincey.
Coca-Cola acquires Costa Coffee: Key things you should know about the deal
- Coca-Cola will purchase the coffee business for £3.9 billion, which translates to approximately $5.1 billion. Coca-Cola expects the transaction to close in the first half of 2019. Upon the closing, The Coca-Cola Company will acquire all issued and outstanding shares of Costa Limited.
- Costa Limited was founded in London in 1971 and has grown to become a major coffee brand across the world. Costa operations include a leading brand, nearly 4,000 retail outlets with highly trained baristas, a coffee vending operation, for-home coffee formats and Costa’s state-of-the-art roastery.
- Costa Limited is a wholly owned subsidiary of Whitbread PLC. The group had acquired Costa in 1995, for £19 million (approx. $25 million) when it had only 39 shops. Whitbread will be seeking shareholder approval for the transaction, which is expected to take place by mid-October, Coca-Cola said in a statement. The deal is subject to customary closing conditions, including antitrust approvals in the European Union and China, it added.
- Coca-Cola’s portfolio already includes the market-leading Georgia brand in Japan, plus coffee products in many other countries. Costa Coffee’s acquisition will expand the company’s existing coffee lineup by adding another leading brand and platform.
- Costa will provides Coca-Cola with strong expertise across the coffee supply chain, including sourcing, vending and distribution. This will be a complement to existing capabilities within the Coca-Cola system.