Coca-Cola Buys Costa Coffee in a £3.9 Billion Deal

By Kim Snaith on at

Currently owned by parent company Whitbread, the Costa chain is about to be sold to Coca-Cola. Whitbread bought the chain back in 1995 when it was just made up of 39 outlets. In the 23 years since, it's grown to have 2,400 branches in the UK along with over 1,400 overseas. As such, Whitbread was planning to demerge Costa from the parent company, spinning it off into a firm of its own. But it seems Coca-Cola swung in with an offer that was much more lucrative for Whitbread: the deal is worth £3.9 billion.

Coca-Cola are known for their soft drinks but they currently have no coffee products in their portfolio, so Costa is an appealing prospect to expand their range. Costa is already the biggest coffee chain in the UK, and under Coca-Cola's reign, it could be set to get even bigger. Speaking to the BBC, Whitbread's chief executive Alison Brittain described the sale as a "win-win", saying, "you could see Costa absolutely everywhere, in vending machines, hotels, restaurants, pubs, cafes - in all the places you see Coke today."

Since announcing the sale, Whitbread's shares have jumped up 17 per cent this morning. The company also owns Brewer's Fayre, Beefeater and Table Table restaurants, as well as the budget hotel chain Premier Inn. Costa isn't the first well-known brand it has let go – it has also previously owned companies like Marriott Hotels and TGI Fridays. Whitbread has stated that the sale of Costa Coffee will allow them to boost the company's pension fund, pay down some debt and expand the Premier Inn chain.

So Costa Coffee as we know it may soon change – and will undoubtedly sell more Coke than it used to. But we can at least look forward to some new Premier Inns popping up over the next few years. [BBC]

Featured image: Costa Coffee