Coca-Cola is buying Costa Coffee for $5 billion

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

Coca-Cola is getting a $5 billion shot of caffeine.

The corporate has agreed to purchase espresso chain Costa Espresso from UK drinks and inns group Whitbread for £three.9 billion ($5.1 billion).

Costa has almost four,000 shops throughout 32 nations. It can give Coca-Cola (KO) “a robust espresso platform throughout components of Europe, Asia Pacific, the Center East and Africa, with the chance for extra enlargement,” Coca-Cola stated in an announcement.

Moreover its hundreds of retail shops, Costa Espresso additionally has smaller on-the-go shops referred to as Costa Categorical, a roastery and for-home espresso merchandise.

Whitbread, which acquired Costa in 1995, stated it would use proceeds from the sale of the espresso enterprise to increase its different massive model, Premier Inn inns.

The deal nonetheless must get approval from shareholders and regulators, and is predicted to be accomplished within the first half of 2019, the businesses stated.

Shopping for Costa places Coke in direct competitors with Starbucks (SBUX) and several other different world espresso manufacturers.

01 coca cola costa coffee SPLIT

Earlier this yr, Nestle (NSRGF) and Starbucks agreed a $7.2 billion world espresso alliance, which can see Nestle market, promote and distribute Starbucks merchandise outdoors its shops worldwide. JAB, the Luxembourg-based holding firm that owns manufacturers like Krispy Kreme and Peet’s Espresso, purchased UK sandwich and occasional chain Pret A Manger in Could.

One other of JAB’s espresso manufacturers, Keurig, merged its enterprise with certainly one of Coca-Cola’s home opponents — Dr Pepper Snapple — in January.

“Scorching drinks is without doubt one of the few segments of the full beverage panorama the place Coca-Cola doesn’t have a worldwide model,” Coca-Cola CEO James Quincy stated Friday. “Costa provides us entry to this market with a robust espresso platform.”

Competitors is heating up in different areas, too. Coca-Cola’s chief rival Pepsi (PEP) introduced earlier this month that it might purchase Israeli DIY seltzer firm SodaStream for $three.2 billion.

CNNMoney (New Delhi) First revealed August 31, 2018: three:12 AM ET

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