Caffeine hit for Coca-Cola as it buys Costa coffee chain

Coca-Cola is hoping to give itself another caffeine-fueled boost.

The company said Friday it will buy the Costa coffee brand from British firm Whitbread for 3.9 billion pounds ($5.1 billion) in cash. Costa is Britain’s biggest coffee company with over 2,400 coffee shops in the U.K. and another 1,400 in more than 30 countries. It has 460 in China, its secondbiggest market.

The deal, expected to complete in the first half of 2019, plugs a big hole in Coca-Cola’s portfolio. Coca-Cola owns the Georgia and Gold Peak coffee brands, but the purchase of Costa will give it a much broader presence.

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

Coca-Cola, which has over 500 brands in its stable including Fanta, innocent smoothies and Powerade sports drinks, certainly has the deep pockets to help push Costa on the world stage. In 2017, it generated operating income of $9.7 billion on revenues of $35.4 billion.

The deal represents a big return to Whitbread, which bought Costa in 1995 for 19 million pounds. Since then, Costa has grown from just 39 shops and in the year to March, Costa made an operating profit of 123 million pounds on sales of 1.29 billion.