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.
“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.
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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