Coca-Cola buys Costa Coffee brand for £3.9bn

Costa Coffee is now part of the Coca-Cola company
Costa Coffee is now part of the Coca-Cola company

The Coca-Cola company has finalised a deal to buy the Costa Coffee company from UK holding company Whitbread for £3.9 billion, proving just how hot the coffee market is right now.

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31 August 2018 | 0

Coca-Cola has shelled out almost £4 billion to purchase Costa, the UK’s biggest coffee chain. The Guardian reports that shares in Costa’s former parent company Whitbread soared after the announcement. Alison Brittain, Whitbread CEO, said there had been interest from other buyers but Coke’s desire to snap up the chain had led to “an absolutely stonking deal” for the business.

Costa was founded in 1995 by eponymous brothers Sergio and Bruno, who subsqeuently sold it to Whitbread for £19m. At the time it had just 39 stores; there are now more than 4,000, including many here in Ireland. Brittain says Coca-Cola’s desire for such a strong coffee brand is indicative of the strength of the market right now.

“They [Coca-Cola] want the coffee product,” she told the Guardian, “because they have no coffee in their range. You could see Costa absolutely everywhere, in vending machines, hotels, restaurants, pubs, cafes – in all the places you see Coke today.

“It was when the Coca-Cola opportunity emerged that we could really see how the complementary nature of the Costa business and the Coke business would mean significantly higher value could be created in the future that would allow Coke to pay an increased price.”

 

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