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Coca-Cola to boost coffee segment with US$5.1bn Costa Coffee acquisition

The Coca-Cola Company is acquiring coffee company Costa Limited for US$5.1 billion, a move that will give Coca-Cola a “strong coffee platform” across parts of Europe, Asia Pacific, the Middle East and Africa. The opportunity for additional expansion is also available, the press statement read.

The acquisition adds a “scalable” coffee platform with critical know-how and expertise in a fast-growing, on-trend category, and expands Coca-Cola’s existing coffee line up, which currently includes Japanese coffee brand Georgia.

Costa also offers Coca-Cola with “strong expertise” across the coffee supply chain, including sourcing, vending and distribution. This will be a complement to existing capabilities within the Coca-Cola system. According to the press statement, the transaction is expected to close in the first half of 2019.

Coca-Cola’s spokesperson confirmed to Marketing that there will be no key personnel changes.

Coca-Cola president and CEO James Quincey said Costa gives the company new capabilities and expertise in coffee, and its system can create opportunities to grow the Costa brand worldwide. “Hot beverages is one of the few segments of the total beverage landscape where Coca-Cola does not have a global brand. Costa gives us access to this market with a strong coffee platform,” he added.

Meanwhile, Costa MD Dominic Paul said being part of the Coca-Cola system will enable Costa to grow the business farther and faster.

“I would like to say a huge thank you to our customers and to everyone in the Costa team who have helped us build the business to this position, and I look forward to the next exciting chapter in Costa’s vision of ‘Inspiring the World to Love Great Coffee’,” Paul added.

Headquartered in the UK, Costa has a presence in Singapore, Malaysia and China, among other markets. For the 2018 financial year ended 1 March 2018, Costa recorded a revenue of approximately US$1.7 billion.

(Read also: Coca-Cola acquires minority stake in Kobe Bryant-backed sports drink)

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