The Coca-Cola Company has announced it is buying London-founded chain Costa Coffee, which has become a global brand since its foundation in 1971 and is seen as Starbucks' main competitor in Europe.
The deal to buy Costa will cost Coca-Cola $5.1 billion. Costa has close to 4,000 retail outlets worldwide and is described by Coca-Cola in its statement as having "highly trained baristas" and "state-of-the-art roastery." The purchase will give Coca-Cola a presence in coffee retail markets across Europe, the Asia Pacific region, the Middle East, and Africa.
“Costa gives Coca-Cola new capabilities and expertise in coffee, and our system can create opportunities to grow the Costa brand worldwide,” said Coca-Cola president and CEO James Quincey in response to the deal. “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.”
Costa owner Whitbread will seek shareholder approval to complete the deal, which is expected to happen by mid-October.
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