A top street coffee chain is brewing up a new chapter as a major soda company prepares to let it go.
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According to Sky News, Coca-Cola is working with bankers to hold exploratory talks about a sale of Costa, Britain’s biggest high street coffee chain.
Preliminary discussions have reportedly taken place with a select group of potential bidders, including private equity firms, according to Sky News sources on Saturday.
Coca-Cola has hired investment bank Lazard to explore business options and assess interest from potential buyers. Preliminary offers are expected early autumn, though Coca-Cola may still decide against a sale.
Costa operates over 2,000 stores across the UK and more than 3,000 worldwide, according to the most recent figures.
Coca-Cola is reported to have a global workforce of approximately 35,000 employees. However, despite multiple inquiries, the company has not provided confirmation regarding the exact number of active outlets or employees worldwide.
Analysts suggest Coca-Cola could face a multibillion-pound loss if it sells Costa Coffee, which it bought for £3.9bn in 2018, as the chain’s value may now be just £2bn.
The proceeds from the disposal would not significantly impact the Atlanta-based company, which had a market value of $304.2bn (£224.9bn) as of Friday’s closing share price.
Coca-Cola Bought the Coffee Chain in 2018
“Costa gives Coca-Cola new capabilities and expertise in coffee, and our system can create opportunities to grow the Costa brand worldwide,” Coca-Cola’s chief executive, James Quincey, explained when they acquired the company.
“Hot beverages are 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.
Costa’s 2023 accounts show the coffee chain earned £1.22bn in revenue.
Although this marked a 9% rise compared to the previous year, it remained below the £1.3 billion achieved in 2018, the last year before Coca-Cola assumed control of the business.
Founded in 1971 by Italian brothers Sergio and Bruno Costa, the chain started as a small venture before being acquired by Whitbread in 1995 for £19 million, when it operated fewer than 40 stores. Today, it has grown into one of Britain’s largest private-sector employers and a staple of high streets nationwide