Cola-Cola buys $5.1bn Costa for 'strong coffee platform'

Costa Coffee

Costa Coffee

Coca-Cola CEO James Quincey said that the acquisition is more about gaining access to Costa's many products - like its coffee vending machines, on-the-go outlets, ready-to-drink iced coffee and beans from its roastery - than it is about owning restaurants.

Quincey emphasized Costa's positioning as a versatile, global coffee platform that can complement Coke's existing interests in the category.

Whitbread said it will use the money to reduce its debt, increase its contribution to the pension fund and return a "significant majority" to shareholders.

Coca-Cola made its first formal approach to Whitbread in late June and the negotiations progressed quickly, with a deal signed at 6:52 on Friday morning, 8 minutes before it was announced to the stock market, Ms. Brittain said.

Whitbread bought Costa in 1995 for £19 million ($24.5 million) from the chain's founders, brothers Sergio and Bruno Costa, when it had just 41 shops.

The £3.9 billion figure put on the deal represents a multiple of more than 16 times Costa's expected full year earnings in 2018. It is now present on most British high streets, with 2,422 outlets across the country and a further 1,399 in worldwide markets, operated as franchises, joint ventures and wholesale outlets.

"This is a coffee strategy, not a retail strategy", he told investors on a call on Friday.

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The state with the largest number of federal workers is California, followed by Virginia, the District of Columbia and Texas. David Cox Sr., president of the American Federation of Government Employees, which represents some 700,000 federal workers.

However, the move also suggests that Coke is steeling itself for an ambitious battle with the likes of Starbucks and JAB Holdings for domination of the fast-growing global hot beverage market. Consumers in the United Kingdom are reducing spending due to inflation and concern that Brexit may hurt the economy.

Coca Cola is to buy coffee chain Costa for £3.9 billion.

Still, Costa outranks Starbucks in the United Kingdom - it also operates a business of 8,000 self-service machines - and is expanding in markets such as China.

Costa is the biggest coffee company in the United Kingdom with over 2,400 coffee shops.

Nestle joined the trend of coffee giants taking aim at smaller niche producers, buying Blue Bottle Coffee and Chameleon Cold Brew. The Swiss food company also paid $7.2 billion to form an alliance with Starbucks that sells products in grocery stores.

"Over the last five years, we've seen nearly $20 billion in growth from specialist coffee shops globally", he wrote.

Rothschild advised Coke on the deal while Goldman Sachs, Morgan Stanley and Deutsche Bank advised Whitbread.

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