Whitbread agrees to sell Costa Coffee for £3.9 billion to Coca-Cola

Whitbread agrees to sell Costa Coffee for £3.9 billion to Coca-Cola

Coca-Cola has announced a surprise move to buy Costa Coffee, one of the UK's largest cafe chains, from current owners Whitbread for £3.9 billion ($5.1 billion). It is now present on most British high streets, with 2,422 outlets across the country and a further 1,399 in worldwide markets, operated as franchises, joint ventures and wholesale outlets.

Whitbread bought the chain back in 1995 when it was just made up of 39 outlets.

Joining the Coca-Cola portfolio, Costa is a leading coffee brand first founded in London in 1971 that has since grown to include almost 4,000 retail outlets, a coffee vending operation, roastery, and home-brewed coffee formats. "Hot beverages is one of the few segments of the total beverage landscape where Coca-Cola does not have a global brand".

So Costa Coffee as we know it may soon change - and will undoubtedly sell more Coke than it used to.

The coffee shop to hotels group said earlier this year that it would split Costa and list it as a separate entity, following pressure from activist investor Elliott.

Whitbread added that it intends to return a significant majority of net cash proceeds to shareholders. As such, Whitbread was planning to demerge Costa from the parent company, spinning it off into a firm of its own.

Whitbread shares soared the most in 19 years as analysts said the business fetched a surprisingly high price.

India on top as England falter in opening session
Trailing the Test series by 2-0, Indian team got off to a flying start posting a total of 329 runs in the first innings. At Number 5, Ajinkya Rahane has played only one knock of note and Jonny Bairstow for England has offered a little more.

"Its global reach should turbo-charge growth in the years to come, and hot drinks are one of the few areas of the wider beverages sector where the soft drinks giant doesn't have a killer brand", he said.

For Costa, Hyett said Costa will get "lots of care and attention" from Coca- Cola.

It has recently expanded into China after growth in Britain became harder to find in a market bursting with chains such as Starbucks, Caffe Nero and thousands of independent outlets.

Costa doesn't now have a presence in North or South America, but Quincey indicated that one potential early expansion route would be to use Costa's vending operation and grow the company's ready-to-drink products.

"Whitbread will also reduce debt and make a contribution to its pension fund, which will provide additional headroom for the expansion of Premier Inn".

Rothschild advised Coke on the deal while Goldman Sachs, Morgan Stanley and Deutsche Bank advised Whitbread.

Related Articles

  • Kyrgios progresses after controversial umpire pep talk

    Kyrgios progresses after controversial umpire pep talk

    The occasionally temperamental Kyrgios appeared to stop trying during the first set, failing to even move while Herbert served. The wild and unusual incident came during the second set, with Kyrgios already one set down and trailing 3-0.
    Mystery woman seen in viral video found safe after shooting in Texas

    Mystery woman seen in viral video found safe after shooting in Texas

    Lieutenant Scott Spencer told Fox News they have received reports claiming she could be a missing woman from as far as Canada. The man's 32-year-old girlfriend has been confirmed by deputies to be the woman captured on the doorbell camera last Friday.
    Scallop row in English Channel affecting Guernsey fishermen

    Scallop row in English Channel affecting Guernsey fishermen

    In an effort to help replenish scallop stocks, France permits its fishermen to fish in the area only between October 1 and May 15. He revealed "around 40" French boats had gathered overnight in protest at British " pillaging " of the scallop supply.
  • Steven Gerrard's nine-man Rangers qualify for the Europa League

    Steven Gerrard's nine-man Rangers qualify for the Europa League

    Not a lot of players have scored 100 goals for Celtic and now I want to get as many as I possibly can. We understand the offer is significant, but it's no good for us.
    Leaked images of iPhone Xs and Apple Watch Series 4 surface online

    Leaked images of iPhone Xs and Apple Watch Series 4 surface online

    As for the Apple Watch , we're again looking at something that largely does not deviate from the Apple Watch as we know it today. Apple Watch 4 Since last three year, Apple has been launching a new Apple Watch at its September event.
    Aaron Rogers, Packers agree to 4-year, $134M deal

    Aaron Rogers, Packers agree to 4-year, $134M deal

    The deal also makes Rodgers the current highest-paid player in the National Football League in new money. Packers quarterback Aaron Rodgers has the reputation of being one of the top passers in the NFL .
  • John McCain Remembered at Phoenix Memorial Service

    John McCain Remembered at Phoenix Memorial Service

    Fitzgerald was asked by Cindy McCain , wife of the late senator, a couple of months ago to speak at the service. Arizona Department of Public Safety troopers lead the processions from the Arizona State Capitol.
    Russian Federation  to hold Mediterranean naval drills as Syria tensions rise

    Russian Federation to hold Mediterranean naval drills as Syria tensions rise

    After retaking a succession of rebel bastions around the country this year, the government has set its sights on Idlib. Al Jazeera's Marwan Bishara discusses the meeting and a potential Idlib attack.
    North Korea Moving to Crypto Exchanges and Mining

    North Korea Moving to Crypto Exchanges and Mining

    The incident marks the fifth Chinese military incursion into South Korea-claimed airspace in 2018, News 1 reported . Alstom said it does not "maintain contact or discussions with any of the country's representatives".
  • Apple stock gains after report of three new iPhones

    Apple stock gains after report of three new iPhones

    However the most payment-efficient model will seemingly be elevated than the mid-range model, potentially complicated customers. However, a new report from Bloomberg has hinted the Series 4 could bring some of the biggest changes to the wearable line yet.
    French environment minister quits government

    French environment minister quits government

    Clearly emotional, Hulot made clear his frustrations at what he said was France's slow pace of progress on green issues. So on Tuesday, he quit his post in dramatic fashion, dealing a blow to President Emmanuel Macron's green credentials.
    Liverpool's best & worst case scenarios for Champions League draw

    Liverpool's best & worst case scenarios for Champions League draw

    Meanwhile, Benfica had an easier time of it away to PAOK , coming from behind to win 4-1 (5-2 agg.) at Toumba Stadium. Holders Real Madrid will be joined by 31 other teams in the hat for the UEFA Champions League group stage draw .