Whitbread is selling its Costa coffee chain to the Coca-Cola Company for £3.9 billion to focus instead on growth opportunities for its Premier Inn hotel business in the UK and Germany.
Whitbread acquired Costa back in 1995 for £19 million when it had only 39 shops and successfully grew the business to be the UK’s largest coffee shop company.
In recent years, the focus has been on evolving Costa into a leading multi-channel, international coffee brand. This laid the groundwork for Coca-Cola’s acquisition.
According to a Whitbread release, the combination of Costa and Coca-Cola will “ensure new product development, continued growth in the UK and more rapid expansion overseas”.
“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 CEO, James Quincey.
“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. I’d like to welcome the team to Coca-Cola and look forward to working with them.”
The deal is expected to complete in the first half of 2019.