Coca-Cola’s swoop for Costa Coffee will cut its exposure to sugar and plastic bottles
Costa
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Coca-Cola’s swoop for Costa Coffee will cut its exposure to sugar and plastic bottles

The growing loathing for the white stuff must keep soft drinks execs awake at night
5 min.
September 2018
PRINTABLE PDF – Less than 1MB

Coca-Cola’s £3.9 billion acquisition of Costa Coffee has made quite a ripple. Atlanta-based Coca-Cola is obviously best known for its soft drinks portfolio, found in supermarkets, kiosks, hotels, bars and restaurants around the world.

Costa, headquartered in the UK, has 3,800 coffee shops in over 30 countries with about two-thirds in its UK home market. Both companies might be all about beverages, but that’s about the only overlap in their operations.

The logic for Costa’s current owner, Whitbread, is straightforward enough. It was coming under investor pressure to focus on its hotel business and get out of coffee. Its chief executive, Alison Brittain, says the price tag achieved a substantial premium over the alternative, which was to simply demerge it – Costa was previously valued at around £3 billion. A far more interesting and complex issue is what makes Costa so attractive to Coca-Cola that it was willing to pay such a premium.

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