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Coca-Cola completes acquisition of Costa Coffee

The Coca-Cola Company has announced it has completed its acquisition of Costa Coffee from Whitbread.

Costa, which has operations in more than 30 countries, gives Coca-Cola a significant footprint in the global coffee business.

“We see great opportunities for value creation through the combination of Costa’s capabilities and Coca-Cola’s marketing expertise and global reach,” The Coca-Cola Company CEO James Quincey says.

“Our vision is to use the strong Costa platform to expand our portfolio in the growing coffee category.”

The Coca-Cola Company says Costa has a scalable platform across multiple formats and channels, from the existing Costa Express vending system to opportunities to introduce ready-to-drink products.

"This move will have appealed to Coca-Cola for two reasons,” says Jonathan Davison, Beverage Analyst at GlobalData.

“The most apparent is the potential growth of Costa Coffee on an international scale. The chain might be the biggest in the [United Kingdom], but it lags well behind Starbucks globally. Of particular value will be the chain's 449 stores in China, where hot drinks volumes across all channels have more than doubled in the last five years.”

Costa operations include a leading brand, nearly 4000 retail outlets and staff, a coffee vending operation, for-home coffee formats and Costa’s roastery.

The acquisition will expand the existing Coca-Cola coffee line-up. The portfolio already includes the Georgia brand in Japan, plus coffee products in many other countries.
Costa also provides Coca-Cola with expertise across the coffee supply chain, including sourcing, vending and distribution. This will be a complement to existing capabilities within the Coca-Cola system.

“The Costa team and I are extremely excited to be joining The Coca-Cola Company,” Costa Managing Director Dominic Paul says.

The US$4.9 billion transaction follows approval from regulatory authorities in the European Union and China.

“We wish our friends and colleagues at Costa all the very best for their future success,” Whitbread Chief Executive Alison Brittain says.

“Whitbread acquired Costa 23 years ago, when it had only 39 shops. Costa has grown to become a leading, international coffee brand, and Coca-Cola is the right partner to take Costa to the next stage of expansion.”

The acquisition was first announced on 31 August, 2018.

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