Coca-Cola acquires Costa coffee for $5.1 billion
The Coca-Cola Co. has reached a definitive agreement to acquire Costa Ltd., which was founded in London in 1971 and has grown to become a major coffee brand across the world. The acquisition of Costa from parent company Whitbread PLC is valued at $5.1 billion.
The Coca-Cola Co. has reached a definitive agreement to acquire Costa Ltd., which was founded in London in 1971 and has grown to become a major coffee brand across the world. The acquisition of Costa from parent company Whitbread PLC is valued at $5.1 billion and will give Coca-Cola a strong coffee platform across parts of Europe, Asia Pacific, the Middle East and Africa, with the opportunity for additional expansion. Costa operations include a leading brand, nearly 4,000 retail outlets, a coffee vending operation, at-home coffee formats, and Costa’s roastery.
For Coca-Cola, the expected acquisition adds a scalable coffee platform with critical know-how and expertise in a fast-growing, on-trend category. Costa ranks as the leading coffee company in the United Kingdom and has a growing footprint in China, among other markets. In addition, Costa has a solid presence with Costa Express, which offers barista-quality coffee in a variety of on-the-go locations, including gas stations, movie theaters, and travel hubs.
“Costa gives Coca-Cola new capabilities and expertise in coffee, and our system can create opportunities to grow the Costa brand worldwide,” said James Quincey, Coca-Cola president and CEO. “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.”
Whitbread will be seeking shareholder approval for the transaction, which is expected to take place by mid-October. The deal is subject to customary closing conditions, including antitrust approvals in the European Union and China. It is expected to close in the first half of 2019.