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.

Microsoft Introduces Xbox All Access Subscription
Please note, monthly payments will continue until the remaining balance on your Dell Preferred Account is paid in full. By adding in the Xbox Game Pass , it also adds a spotlight on a service which is likely flying under the radar a bit.

"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

  • 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.

    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 .
    Vodafone's Australia operation in $15bn merger with TPG

    Vodafone's Australia operation in $15bn merger with TPG

    Vodafone has promised that its popular $5/day global roaming deal will remain after the proposed merger with broadband telco TPG. Through a series of acquisitions, TPG has a 11,000km-long fibre network providing wholesale broadband services to businesses.
  • 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.
    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.
    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.
  • 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.
    Hundreds honor John McCain at public viewing

    Hundreds honor John McCain at public viewing

    Graham (R-S.C.) speaks to reporters about the late senator John McCain (R-Ariz.) on Capitol Hill in Washington on Tuesday. McCain, who was first elected to the Senate in 1987, died Saturday at age 81 , following a battle with brain cancer.
    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.
  • 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.
    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.
    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 .