EC approves Whitbread’s £3.9bn sale of coffee shop chain Costa to Coca-Cola

Whitbread, a British multinational hotel, coffee shop and restaurant company, said that the European Commission has approved its £3.9 billion sale of coffee shop chain Costa to soft drinks giant Coca-Cola.

The clearance from the European Commission was made under the EC Merger Regulation. Prior to this, in late November, China’s State Administration for Market Regulation approved Coca-Cola acquisition of Costa from Whitbread.

Whitbread expects the completion of the sale of the coffee shop chain to occur next month.

The deal between Whitbread and Coca-Cola was signed in August 2018. Coca-Cola expects the acquisition of Costa to give it a solid coffee platform in parts of Europe, the Middle East, Asia Pacific and Africa, with opportunity for additional expansion.

Soft drinks giant Coca-Cola to acquire coffee shop chain Costa from Whitbread for $5.1bn. Photo courtesy of THE COCA-COLA COMPANY.

Established in London in 1971, Costa has nearly 4,000 retail outlets with baristas, a coffee vending operation, for-home coffee formats and Costa’s roastery. The coffee shop chain was acquired by Whitbread for £19 million in 1995 when it had just 39 coffee shops.

Currently, Costa, apart from being a popular coffee company in the UK, has grown its presences in China and other markets. The coffee shop chain has a strong footprint with Costa Express, which comprises barista-quality coffee in a variety of on-the-go locations that include cinema theaters, gas stations and travel networks.

Costa’s acquisition will expand the current coffee lineup of Coca-Cola through the addition of another coffee brand and platform, which will join the Georgia coffee brand in Japan and other coffee products in various other countries.