Coca-Cola swallows up Costa in £4billion deal
CoCa-CoLa has agreed to buy britain’s biggest coffee shop chain for £3.9billion in a major vote of confidence ahead of brexit.
The american fizzy drinks giant yesterday struck a deal to take control of Costa Coffee – setting the scene for a ‘latte war’ as it battles starbucks for global domination.
The move stunned the City, and shares in Costa owner Whitbread jumped 14 per cent as investors welcomed the sale of the coffee business for £1billion more than its original price tag.
Coca-Cola will take on Costa’s 2,400 shops in the UK and a further 1,400 in 31 other countries around the world including in China, saudi arabia and India.
It will also own the coffee chain’s 8,000 self-service express machines, which are dotted around petrol stations and supermarkets in eight countries including the UK.
Costa will have the spending power to develop chilled readyto-drink coffees that will be available in supermarkets alongside similar starbucks products and will be sat next to cans of Diet Coke in Coca-Cola’s ten million vending machines around the world. It marks Coca-Cola’s first foray into coffee and the company is expected to focus on the ready-to-drink ‘cold brew coffees’, a rapidly growing area of the market.
Whitbread chief executive alison brittain said: ‘You’ll be seeing Costa all over the world, wherever you see Coke. You could see Costa absolutely everywhere, in vending machines, hotels, restaurants, pubs, cafes.’
James Quincey, the british president and chief executive of Coca-Cola, said: ‘Coffee is one of the strongest growing categories in the world, and CocaCola needs to expand into coffee and hot drinks. The Costa brand has potential for expansion into ready-to-drink coffee across many markets globally.’
Coca-Cola’s purchase demonstrates the soaring value of britain’s coffee shops. The number of cups of coffee consumed in the UK has soared by 25million over the past decade to 95million a day. Last year britons spent £9.6billion in coffee shops.
Costa was started as a small roastery in Lambeth, south London, in 1971 by Italian brothers sergio and bruno Costa. They opened their first cafe in 1978.
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