USA/UK: Coca Cola buys Costa Coffee for $5.1bn

The Coca-Cola Company today announced that it has reached a definitive agreement to acquire Costa, which was founded in London in 1971 and has grown to become a major coffee brand across the world.

Costa ranks as the leading coffee company in the United Kingdom and has a growing footprint in China, among other markets. 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, in various formats, has the potential for further expansion with customers across the Coca-Cola system.

The acquisition of Costa from parent company Whitbread 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 with highly trained baristas, a coffee vending operation, for-home coffee formats and Costa’s state-of-the-art roastery. The transaction is expected to close in the first half of 2019.

For Coca-Cola, the expected acquisition adds a scalable coffee platform with critical know-how and expertise in a fast-growing, on-trend category.

The acquisition will expand the existing Coca-Cola coffee lineup by adding another leading brand and platform. The portfolio already includes the market-leading Georgia brand in Japan, plus coffee products in many other countries.

In a press release James Quincey, president and CEO of The Coca-Cola Company  was quoted as saying: “At The Coca-Cola Company, we’re continuing to evolve as a total beverage company. This means we sell Coke, of course, but also so much more. Today, we’ve taken another important step toward becoming the total beverage company we aspire to be.”

“Coffee helps us get into hot beverages. Coffee is one of the fastest-growing beverage categories in the world, at 6%. It’s also a category with many different elements, from vending to coffee shops to roast-and-ground to instant to pods and capsules.”

“It’s very important to me that we let Costa be Costa. We’ll operate Costa with our successful, connected-but-not-integrated model within Coca-Cola. Costa is a very different business for us, and we want current Costa employees – from executives in the UK to baristas in stores around the world – to be assured that we respect and value their expertise.”

 

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