Coca-Cola Acquires Costa
UNITED KINGDOM
The Coca-Cola Company is acquiring Costa Limited, the United Kingdom’s leading coffee brand, for USD $5.1 billion. The agreement, announced Aug. 31, is expected to close by July 2019.
Costa recently became a wholly owned subsidiary of parent company Whitbread PLC. As such, the sale requires Whitbread shareholders approval. Coca-Cola officials indicate that will take place by mid-October.
Coca-Cola Acquires Costa
“Costa gives Coca-Cola new capabilities and expertise in coffee, and our system can create opportunities to grow the Costa brand worldwide,” said James Quincey, Coca-Cola president and c.e.o. “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 generated $1.7 billion in revenues and $312 million in net income in the 2018 fiscal year that ended March 1, Coca-Cola said.
With the acquisition, Coca-Cola gains about 4,000 retail coffee outlets and 20,000 employees in more than 30 countries. In addition, Costa Express vending machines are in 8,000 locations worldwide.
Coca-Cola also will own Costa’s new roastery in Basildon, Essex, which began operations in early 2017 quadrupling its previous roasting capacity to 45,000 tons each year.
The acquisition helps Coca-Cola to expand its existing coffee portfolio and gain “strong expertise across the coffee supply chain including coursing, vending and distribution,” according to a company statement.
“The Costa team and I are extremely excited to be joining The Coca-Cola Company,” Costa managing director Dominic Paul said in a statement. “… Being part of the Coca-Cola system will enable us to grow the business farther and faster.”