The Coca-Cola Co., Atlanta, has reached a definitive agreement to acquire Costa Ltd., which was founded in London in 1971. The acquisition of Costa from parent company Whitbread PLC is valued at $5.1 billion and will give Coca-Cola a strong coffee platform across parts of Europe, Asia Pacific, the Middle East and Africa, with the opportunity for additional expansion, the company says.
Costa operations include nearly 4,000 retail outlets with highly trained baristas, a coffee vending operation, for at-home coffee formats and Costa’s state-of-the-art roaster, it adds. For Coca-Cola, the expected acquisition adds a scalable coffee platform with critical know-how and expertise in a fast-growing, on-trend category, according to the company.
The acquisition will expand the existing Coca-Cola coffee lineup. The portfolio already includes the market-leading Georgia brand in Japan, plus coffee products in many other countries, it says. Costa also provides Coca-Cola with expertise across the coffee supply chain, including sourcing, vending and distribution, it adds. This will be a complement to existing capabilities within the Coca-Cola system.
“Costa gives Coca-Cola new capabilities and expertise in coffee, and our system can create opportunities to grow the Costa brand worldwide,” said Coca-Cola President and Chief Executive Officer James Quincey, in a statement. “Hot beverages is one of the few segments of the total beverage landscape where Coca-Cola does not have a global brand. Costa gives us access to this market with a strong coffee platform.”
Costa Managing Director Dominic Paul added: “The Costa team and I are extremely excited to be joining The Coca-Cola Co. Costa is a fantastic business with committed and passionate associates, a great track record and enormous global potential. Being part of the Coca-Cola system will enable us to grow the business farther and faster. I would like to say a huge thank you to our customers and to everyone in the Costa team who have helped us build the business to this position, and I look forward to the next exciting chapter in Costa’s vision of inspiring the world to love great coffee.”
Whitbread will be seeking shareholder approval for the transaction, which is expected to take place by mid-October. The deal is subject to customary closing conditions, including antitrust approvals in the European Union and China. It is expected to close in the first half of 2019.