Brands
Coca-Cola looks to sell Costa Coffee, Semafor reports
The beverage giant is said to be seeking to unwind its $5.1bn purchase of the British coffee chain after an earlier sale attempt fell short
TLANTA: Coca-Cola wants out of coffee, again. The beverage giant is seeking to unwind its $5.1bn acquisition of Costa Coffee, the British coffeehouse chain, after a sales process failed earlier this year, Semafor reported on Thursday, citing people familiar with the matter.
This is a second act, not a first. Coca-Cola had scrapped its earlier plans to sell Costa after offers from private equity firms came in below expectations, the Financial Times reported in January. The gap between what Coca-Cola paid and what bidders were willing to offer appears to have been the sticking point.
Strategic buyers have looked at the asset too. At least one strategic acquirer considered what a deal for Costa would look like before passing, citing valuation and strategic issues, according to the Semafor report.
The logic of the original deal was clear. Coca-Cola bought Costa in 2018 for $5.1bn in an effort to extend its push into healthier drinks. Coffee offered a route beyond fizzy drinks and into a category with daily habits and loyal customers. The latest report suggests the company is now reconsidering that bet.
The open question is price. It could not be determined what Coca-Cola might seek for Costa if it put the chain back on the market, the report added. Coca-Cola did not immediately respond to a request for comment.
