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Coca-Cola to acquire U.K.-based coffee giant Costa for $5.1 billion

Georgia-based Coca-Cola Company has entered into an agreement with the United Kingdom’s largest hospitality company to acquire its Costa Coffee brand for $5.1 billion.

The acquisition gives Coca-Cola access to a growing hot beverage market in Europe, Asia Pacific, the Middle East and Africa besides expanding its existing coffee lineup with a leading brand.

The deal with Whitbread PLC is pending the approval of Whitbread shareholders in October. Once the deal is completed mid-next year, Coca-Cola will acquire all the issued and outstanding shares of Costa.

Coca-Cola to acquire U.K.’s major coffee brand, Costa in an agreement expected to be finalized next year. WHITBREAD AND COCA-COLA (The Atlanta Journal-Constitution)

“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 CEO James Quincey.

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Costa currently operates in 4,000 locations, but “Being part of the Coca-Cola system will enable us to grow the business farther and faster,” said Costa’s Managing Director Dominic Paul.

Quincey sees the agreement as a means for the company to be a leader in the growing but fragmented global coffee market.

“I’m excited about Costa because it can help Coca-Cola become even better – together, Coca-Cola and Costa will take another great step as a total beverage company,” he said.

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