Coca-Cola completes Costa acquisition: ‘Our vision is to use Costa’s platform to expand in the growing coffee category’

By Rachel Arthur contact

- Last updated on GMT

Coca-Cola completes Costa coffee acquisition

Related tags: Coffee, The coca-cola company, M&A

The Coca-Cola Company has completed its acquisition of Costa Limited from Whitbread PLC: putting Coca-Cola in charge of the world’s second largest coffee chain.

The $4.9bn (£3.9bn) transaction has been completed following the necessary approvals from regulatory authorities in the EU and China.

Costa was founded in London in 1971 and bought by Whitbread in 1995 (Whitbread is the owner of hotel chain Premier Inn and restaurants Beefeater and Brewers Fayre). Costa now has operations in more than 30 countries, including China, Europe, Asia Pacific, the Middle East and Africa.

What next for Costa?​ 

The acquisition was announced in August,​ with Coca-Cola eyeing up the chance to gain a significant global footprint in the coffee category. The acquisition covers the Costa brand, nearly 4,000 retail outlets, a coffee vending operations, Costa’s roastery and for-home coffee formats.

The acquisition of Costa helps Coca-Cola spring into the global coffee category: which is growing at around 6% a year and is valued at around $0.5 trillion.  

In turn, this helps Coca-Cola on its mission to move beyond soda and into wider beverage categories.

Coca-Cola’s plans for Costa​ include expansion of its presence into further European, Asian, African and Middle Eastern markets; and the chance to develop RTD products.

However, the soft drinks giant says that Costa will continue to operate in a similar manner as it does today, rather than being engulfed into Coca-Cola’s business, in a ‘connected-but-not-integrated’ model.

James Quincey, CEO, The Coca-Cola Company, said: “We see great opportunities for value creation through the combination of Costa’s capabilities and Coca-Cola’s marketing expertise and global reach.

“Our vision is to use the strong Costa platform to expand our portfolio in the growing coffee category.”

Alison Brittain, chief executive, Whitbread, said: “Whitbread acquired Costa 23 years ago, when it had only 39 shops. Costa has grown to become a leading, international coffee brand, and Coca-Cola is the right partner to take Costa to the next stage of expansion.”

Related topics: Tea and Coffee, Coca-Cola

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