Coca-Cola has agreed to buy the UK chain Costa Coffee for $5.1 billion from UK leisure group Whitbread to expand itself in the hot drink market. After the deal was announced, Whitbread shares jumped 18 percent post announcing the deal. The deal is supposed to close in the first half of 2019, subject to shareholder and regulatory approval. Coca-Cola Launches First Alcoholic Drink 'Lemon-Do' in Japan: Inspired by 'Chu-Hi' Alcopops
According to a Bloomberg report, Coca-Cola Chief Executive Officer James Quincey said in a statement, “Hot beverages is one of the few remaining segments of the total beverage landscape where Coca-Cola does not have a global brand. Costa gives us access to this market through a strong coffee platform."
Reportedly, Whitbread Plc has agreed to sell Costa at a price that’s 16 times this year’s earnings before interest, taxes, depreciation and amortisation. Whitbread had acquired Costa in 1995, and it will use the money from the sale of the coffee business to expand its other big brand, Premier Inn hotels.