Coca-Cola to buy Costa Coffee for £3.9bn

Adjust Comment Print

Whitbread acquired Costa in 1995 for 19 million pounds when it had only 39 shops.

The deal still needs to get approval from shareholders and regulators, and is expected to be completed in the first half of 2019, the companies said.

Coca-Cola has agreed to buy the United Kingdom chain Costa Coffee for $5.1bn, stepping into a battle with Starbucks as it gains a global brand in hot drinks.

Coca-Cola's planned purchase follows Nestlé's $7 billion licensing deal to sell Starbucks coffee in grocery stores around the world to revitalize its hot-drink business, which experts say has stagnated, especially with younger customers. It is now present on most British high streets, with 2,422 outlets across the country and a further 1,399 in global markets, operated as franchises, joint ventures and wholesale outlets.

The announcement comes three days after Nespresso maker Nestle said it sealed a deal to market the products of United States coffee giant Starbucks around the world, outside of its cafes. The Costa purchase is Coca-Cola's biggest push into operating stores, just as weak consumption in the United Kingdom leads a series of retailers such as BHS out of business.

Obama, George Bush Mourn John McCain
John McCain first visited Israel in the late 1970s, and he returned to the Holy Land many more times over the following decades. Trump has been criticised for his feud with McCain, which started after he underplayed the senator's renowned military service .

"Hot beverages is one of the few segments of the total beverage landscape where Coca-Cola does not have a global brand", Coca-Cola CEO James Quincey said.

Coca-Cola is hoping for a caffeine-fueled boost with the acquisition of British coffee chain Costa. Quincey indicated that one potential early expansion route would be to use Costa's vending operation and expand the company's ready-to-drink products.

Whitbread said it will now focus on value hotel chain Premier Inn.

Whitbread shares climbed more than 16 percent Friday on the London Stock Exchange.

The surprise announcement immediately prompted speculation that the FTSE 100 leisure group's remaining Premier Inn business could also attract the attention of suitors amid growing consolidation in the hotel sector. Some will be used to pay down debt and to make a contributing to the pension fund. "A significant majority" of the proceeds will be given to the shareholders, the firm added.