Coca-Cola acquires coffee chain Costa for £3.9bn

Coca-Cola company on Friday said it will buy global coffee chain Costa from Whitbread for £3.9 billion ($5.1 billion).

The global beverage producer made this known in a statement by its Chief Executive Officer, James Quincey.

“Hot beverages is one of the few remaining segments of the total beverage landscape where Coca-Cola does not have a global brand. Costa gives us access to this market through a strong coffee platform,” the statement read.

Coca-cola’s plan to buy Costa is coming amid concerns over health risks associated to the consumption of carbonated drinks which has affected the demand of the company’s products in the United States and some other markets around the world.

Early this month, Coca-cola’s major competitor, PepsiCo had signed a similar deal to buy SodaStream, an Israeli company making machines that carbonate home tap water, for $3.2 billion.

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The development also followed concerns over mounting waste from soda cans and plastics in landfills worldwide.

“The announcement today represents a substantial premium to the value that would have been created through the demerger of the business and we expect to return a significant majority of net proceeds to shareholders,” Whitbread chief executive Alison Brittain said in a statement.

“Whitbread will also reduce debt and make a contribution to its pension fund, which will provide additional headroom for the expansion of Premier Inn.”

Whitbread acquired Costa in 1995 from its founders, Sergio and Bruno Costa, and presently runs about 2,400 stores in the UK and some 1,400 around the world.

Costa also operates more than 8,000 Costa Express self-serve machines in eight countries, as well as placing its products in supermarkets.

 

 

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