Coca-Cola to buy Costa coffee chain for $5.1 billion

Published: August 31, 2018 18:01:14 | Updated: September 03, 2018 10:45:49

Coca-Cola is to buy the UK’s biggest coffee chain Costa coffee from owner Whitbread in a deal worth $5.1 billion (3.9 billion pounds).

Whitbread had intended to spin off the world's second largest coffee chain as a separate firm, but said a straight sale was more profitable.

Chief executive Alison Brittain said Whitbread would now focus on its Premier Inn business in the UK and Germany.

Whitbread bought Costa for just £19 million in 1995, reports BBC.

At the time, it had just 39 shops. It now has more than 2,400 UK coffee shops, as well as some 1,400 outlets in 31 overseas markets. Costa Express has 8,237 vending machines worldwide.


Whitbread shares rose more than 17 per cent in early Friday trading.

Whitbread boss Alison Brittain said that Coca-Cola wanted to buy Costa because "they want the coffee product, they have no coffee in their range".

She said the money from the sale would be used to expand the Premier Inn chain, return some cash to shareholders, pay down debt and boost the pension fund.

Describing the sale as a "win-win" for everyone, she said the price paid by Coca-Cola was far higher than if Costa had been demerged into a stand-alone company on the stock market.

She said she thought the beverage giant would use Costa to create "ready to drink, cold brew coffees".

"You could see Costa absolutely everywhere, in vending machines, hotels, restaurants, pubs, cafes - in all the places you see Coke today," she added.

Whitbread announced earlier this year that it was planning to spin off Costa.

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