Coca-Cola takes big step into coffee with $5.1 billion Costa deal

Coca-Cola CEO'We try to be more than a soda company

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.

Coca-Cola on Friday said it had agreed to buy worldwide coffee chain Costa from its United Kingdom owner Whitbread, in a deal that gives the beverages behemoth its first global coffee brand.

Nestle, the market leader in packaged coffee, for example, has sealed a $7 billion licensing deal for Starbucks' retail business, while Europe's billionaire Reimann clan has built the JAB empire spanning coffee brands such as Kenco, Douwe Egberts and soft-drink maker Dr Pepper Snapple. Coca-Cola President and CEO James Quincey said the company wants to spend more in the hot beverages segment, adding that Coca-Cola can be a global brand in this category. It has invested heavily in Costa's expansion overseas recently, but had been looking to siphon off the business to generate funds for the expansion and for its other business, the budget hotel chain Premier Inn. Access to Coca-Cola's vast global distribution, sourcing and logistics network should generate significant synergies to boost Costa's profitability.

Whitbread said Friday that it would focus on its hospitality businesses under the Premier Inn franchise in the United Kingdom and Germany.

Nicholas Hyett, an equity analyst at London-based stockbrokers Hargreaves Lansdown, said Costa will get "lots of care and attention" from Coca-Cola.

The Costa deal opens a new business line for a company synonymous with fizzy, sugary beverages like Coca-Cola, Sprite, or Fanta, underscoring the pressure to find new areas of growth as consumer tastes change.

Whitbread bought Costa for 19 million pounds in 1995, when it had just 39 shops. "Coca-Cola's acquisition of Costa Coffee will heat up competition in the ready-to-drink coffee market, but JAB already has a strong footprint in retail coffee and remains a clear market leader by some margin".

Motorcade with John McCain's casket arrives at Arizona's capitol
If she's victorious, Democrats could pick up an Arizona Senate seat for the first time since Dennis DiConcini left office in 1995. Judith Hatch, a veteran from Phoenix , started the day by handing out flags to those who were assembled.

Elliott Management, another US -activist firm, then emerged as Whitbread's biggest shareholder in April with a stake of more than 6 per cent, and also began calling for a breakup of the group.

Some will be used to pay down debt and to make a contribution to the pension fund.

"On the one hand, £3.9bn is an undeniably rich valuation and likely far better than Costa could achieve as an independently listed company, valuing its earnings higher than those of the mighty Starbucks", he said. "Being part of the Coca-Cola system will enable us to grow the business farther and faster".

Costa Coffee has sought global expansion in recent years, particularly in China, as it looked to offset declining sales on British high streets.

"[Coke] plans to expand Costa's retail format east towards Asia, where coffee consumption habits are less established", Cowen analysts wrote in a "quick take" report.

Rothschild advised Coke on the deal.

Related News:

  • DC Universe To Launch Streaming Service On Batman Day

    DC Universe To Launch Streaming Service On Batman Day

    Other content available on the streaming platform includes various digital comics and animated shows such as Young Justice . DC Entertainment has officially released a brand new set of images from the upcoming DC Universe flagship series Titans .
    Wawrinka, Murray back with a bang

    Wawrinka, Murray back with a bang

    The item had more than 4 million views by Monday evening, when Williams beat Magda Linette 6-4, 6-0 in the first round of the U.S. Spaniard David Ferrer retired during the second set of his opening-round match against countryman Rafael Nadal at the U.S.
    Yet Another Google Pixel 3 XL Leaks Weeks Ahead Of Launch

    Yet Another Google Pixel 3 XL Leaks Weeks Ahead Of Launch

    So the Google Pixel phones are launched by late October, they will be launched after a month of the Apple iPhone 2018 launch. The Google Pixel 3 and Pixel 3 XL has been leaked in all glory much before Google had even announced the launch date.
  • United States  ends funding for UN Palestinian refugee agency

    United States ends funding for UN Palestinian refugee agency

    In January, the Trump administration released $60 million in funds but withheld a further $65 million it had been due to provide. Critics say that UNRWA's strategy perpetuates the Palestinian "refugee" problem , instead of devising a solution for it.
    RBI’s latest report is clinching evidence that demonetisation was a failure

    RBI’s latest report is clinching evidence that demonetisation was a failure

    The government, while announcing demonetisation, had also cited checking counterfeit notes as one of the reasons. This meant just Rs 10,720 crore of the junked currency did not return to the banking system.
    Packers sign QB Aaron Rodgers to contract extension

    Packers sign QB Aaron Rodgers to contract extension

    Rodgers gets more than $100 million in guarantees, Jones says. "I'm not trying to screw them, you know", Rodgers said. Rodgers has two seasons remaining on his five-year, $110 million contract signed in 2013.
  • UEFA Champions League group stage draw comes up with interesting match-ups

    UEFA Champions League group stage draw comes up with interesting match-ups

    The draw was also kind on German champions Bayern Munich, although they will meet two great European names in Benfica and Ajax. Group D is possibly the most open, featuring former European champions Porto, Lokomotiv Moscow, Schalke 04 and Galatasaray.

    French actor Gerard Depardieu denies rape allegations

    Depardieu has appeared in 200 films over six decades and holds a rare position as a French actor who is known in Hollywood. A lawyer for Depardieu told AFP that the actor "absolutely denies any attack, any rape".
    Pope Francis must resign, says former Vatican ambassador after Cardinal’s sex abuse

    Pope Francis must resign, says former Vatican ambassador after Cardinal’s sex abuse

    McCarrick was accused of sexually harassing and abusing young adult seminarians, as well as sexually abusing two boys decades ago. Among other things, McCarrick has been accused of sexual abuse of seminarians and priests when he was a bishop in New Jersey.
  • Nintendo Creates Brand New IP for Smart Devices

    Nintendo Creates Brand New IP for Smart Devices

    As is the case with many mobile games, they tend to show off the concept and characters more than anything else. Dragalia Lost is an all-new action-RPG, they've previously made mobile RPG titles like Gran Blue Fantasy.
    White House Counsel Don McGahn to Step Down, Trump Confirms

    White House Counsel Don McGahn to Step Down, Trump Confirms

    The New Jersey native had been a partner at Jones Day, one of the world's largest law firms. The president later denounced the reports as "fake news".
    Australia's foreign minister quits after leadership change World News

    Australia's foreign minister quits after leadership change World News

    She said: "Today I advised the prime minister that I will be resigning from my Cabinet position as minister for foreign affairs". The ALP has already released an ad, launching an attack on new Prime Minister Scott Morrison .

Most liked

California passes ‘Gold Standard’ net-neutrality protections
In July, California passed its own version of GDPR , sending the tech community into a frenzy. "They're still paying attention". The measure is scheduled for votes in the Senate and Assembly Friday night following months of contentious negotiations.

Puerto Rico hurricane toll 'a miracle' at 2975
Still, they have no option, if they want to minimize the suffering and fatalities that followed Hurricane Maria. For months, there's been speculation the death toll was much higher than what the government was reporting.

Eddie Howe rues missed chances in Bournemouth defeat at Chelsea
The only two Chelsea players on injury are Cesc Fabregas and Marco van Ginkel. But I also think he can improve in the defensive.

India´s economic growth surges to 8.2pc
But, not the government, which now expected that even its projections of up to 7.5 per cent growth in FY19 may be crossed. Sector-wise growth figures for GVA show that manufacturing and construction have registered the biggest improvements.

Ronaldo’s Agent Calls UEFA ‘Shameful’ After Modric Takes Home Award
He edged out the likes of Juventus forward Cristiano Ronaldo and Liverpool forward Mohamed Salah. Group H: Juventus, Manchester United , Valencia, Young Boys.

Frank Field says Labour has threatened to kick him out of party
A number of Mr Field's Labour colleagues have praised him and expressed their own concerns about their party. In the letter he said allegations made to Labour about bullying had resulted in "no decisive action".

Producer Slams NBC for Impeding Weinstein Story: ‘Massive Breach of Journalistic Integrity’
Once the story broke, NBC News employees were confused as to why their bosses had willingly let go of such an explosive story. Noah Oppenheim , the president of NBC News, told the New York Times Farrow "was never told to stop in the way he's implying".

Aretha Franklin: Stars and fans gather for funeral
She stood on the front lines of the civil rights movement, where her music served as a frequent anthem. Clad in all black with silver jewelry, Hill had the crowd on their feet during her performance.

Man Utd boss Mourinho pleased for Shaw: He's stronger physically and mentally
Southgate also spoke of the conversations that led to Ashley Young, Gary Cahill and Jamie Vardy being left out of the squad. James Tarkowski and Adam Lallana are the other changes from the 23-man World Cup squad, replacing Phil Jones and Vardy.

Major League Baseball trade rumors: Yankees trying to finalize deal for Andrew McCutchen
The Giants were never going to put a qualifying offer on McCutchen, but they still could try to bring him back in the offseason. The trade is expected to be completed by Friday, the deadline for players on new teams to be eligible for postseason rosters.

Apple announces special event for September 12
Anyway, here they are, one on top of the other, in the first leaked render depicting two thirds of Apple's 2018 iPhone lineup. We are less than two weeks away from Apple's annual fall event - where up to three new iPhone models are expected .

Serena Williams Creates Vegan Clothing Line to Empower Women
Cornet said she was stunned that the furor had caused so much controversy and was happy to accept the USTA's apology. The good thing is nobody knows who's going to win. 'I think it's very fair from them to apologise to me.

White House flags lowered to half-staff for Sen. McCain amid criticism
After McCain's death, Trump tweeted : "My deepest sympathies and respect go out to the family of Senator John McCain ". Flag Code states the flag should be lowered "on the day of death and the following day for a Member of Congress".

Elon Musk reignites 'pedo' claims against United Kingdom cave diver
Unsworth had said he was considering taking legal action against Musk. "Sorry pedo guy , you really did ask for it". Musk responded to her post denying that he had cried during the interview.

Sarri surprised by defensive Toon
They held out until the 76th minute when Eden Hazard scored from the spot after Marcos Alonso was brought down by Fabian Schar .