Coca-Cola stirs up plan to sell coffee giant Costa

Coca-Cola, Atlanta-based soft drinks company, has stirred up plans to sell Britain’s one of the biggest high street coffee chains, Costa in a recent move after acquiring its chain more than six years ago.

As reported by Sky News, Coca-Cola is collaborating with bankers at Lazard, the Investment Bank, to hold preliminary talks about a sale of Costa.

According to city sources, a small number of potential bidders and private equity firms have held the talks with a soft drink company assisted by the investment bank to review the suitable options for business.

Costa has more than 2000 stores in the UK and over 3000 globally. The coffee chain also houses 35,000 global workforce.

In 2018, Coca-Cola acquired the chain from parent company Whitbread, the London-listed owner of the Premier Inn hotel chain, for £3.9bn to reduce its reliance on sugary soft beverages.

According to analysts, the potential sale of high-street coffee could cause a multibillion pound loss on the £3.9bn.

After dropping its value, Costa could now sell for as little as £2 billion. Consequently, the sale would prove insignificant for its parent company which has a market worth $304.2bn (£224.9bn).

For several years, Costa coffee has been facing difficulty in upkeep with financial performance, leading to loss in sales.

James Quincey, Coca-Cola’s chief executive, commented on financial pressures, "We're in the mode of reflecting on what we've learned, thinking about how we might want to find new avenues to grow in the coffee category while continuing to run the Costa business successfully."