€4.5BN COSTA COLA ANALYSIS

COCA-COLA is buying high street coffee giant Costa for €4.5billion.

The US soft drinks company is purchasing the firm at a premium in a belated bid to crack the €125billion-ayear global coffee market.

The price is around €1billion more than analysts say Costa is worth.

Coca-cola’s boss, Briton James Quince, said it is a “winning company that can go global”.

The firm is expected to make a push into chilled coffee. It will be battling its US rival, market-dominating Starbucks.

British firm Whitbread paid €21million for Costa’s 39 branches in 1995. Now, it has more than 2,400 UK and 1,400 overseas stores – more than 100 in Ireland – and 8,000 vending machines.

Whitbread boss

Brittain said: “In Alison all the places you see Coke today, in the future you could see Costa Coffee.” Whitbread also owns Premier Inn hotels and Beefeater restaurants.

It will use the cash to cut debt, bump up its pension fund and pay shareholders. Angus Grierson, managing director of LGB Corporate Finance, said: “The substantial premium Coca-cola is paying reflects the urgency with which the company needs to reduce its focus on sugary beverages.” A NATION of tea drinkers has clearly gone coffee crazy.

Eight in 10 visit a coffee shop at least once a week, shelling out on 48 million cups along the way.

Contrast that to falling fizzy drinks sales in the face of an obesity crisis and the sugar tax and you see why Coca-cola was spooked into action.

Coke isn’t alone in waking up and smelling the money.

A billionaire German family bought British coffee and sandwich chain Pret a Manger for €1.7billion this year.

And Nestle is paying Starbucks €6billion to flog its coffee in shops.

That piles pressure on all but the best independent coffee shops.

Coca-cola’s move is the “Real Thing” all right, but it’s paying a fortune for dragging its feet.

Price the British firm Whitbread paid for 39 branches in 1995

BY GRAHAM HISCOTT