Costa Coffee sale: Coca-Cola to buy UK's biggest coffee chain for £3.9bn
Leisure group Whitbread says sale 'in best interests of shareholders'
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Costa Coffee owner Whitbread has agreed to sell Britain’s biggest coffee chain to Coca-Cola in a £3.9bn deal.
Whitbread, a leisure group taking in coffee shops and hotels, said earlier this year it would spin off Costa and list it as a separate entity, following pressure from activist investor Elliott.
But on Friday the company said a sale of the business is now “in the best interests of shareholders”. Whitbread’s stock rose more than 18 per cent in early trading on Friday.
Proceeds of the deal will be used to pay down debt and boost the pension fund. Whitbread added it intends to return a significant majority of net cash proceeds to shareholders.
It was reported earlier this year that Whitbread has been approached informally over a potential buyout of Costa.
The company said the sale of the coffee chain will allow it to focus on its Premier Inn hotels business.
Chief executive Alison Brittain said: “This transaction is great news for shareholders as it recognises the strategic value we have developed in the Costa brand and its international growth potential, and accelerates the realisation of value for shareholders in cash.
“This combination will ensure new product development, continued growth in the UK and more rapid expansion overseas.”
Whitbread acquired Costa in 1995 for £19 million from founders Sergio and Bruno Costa when it had only 39 shops.
It now has more than 2,400 outlets and is embarking on overseas expansion.
Coca-Cola boss James Quincey said: “Costa gives Coca-Cola new capabilities and expertise in coffee, and our system can create opportunities to grow the Costa brand worldwide.
“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.”
PA
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments