Shares in one of Britain's biggest coffee chains surge 20% after Coca-Cola announces $5.1 billion takeover

pulse

August 31, 2018 8:21 AM

Costa Coffee said that Coca-Cola's offer is 16 times the chain's expected earnings for 2018. Coca-Cola currently has no presence in the coffee market, and wants to use the deal to expand into the space.

US beverage giant Coca-Cola will buy British coffee shop chain Costa in a surprise acquisition.
Costa, which is currently owned by Whitbread, is being sold for £3.9 billion ($5.1 billion).
Coca-Cola currently has no presence in the coffee market, and wants to use the deal to expand into the space.
Shares in Whitbread jump almost 20% at the open on the news.

Coca-Cola has announced a surprise move to buy Costa Coffee, one of the UK's largest cafe chains, from current owners Whitbread for £3.9 billion ($5.1 billion).

Whitbread, which also owns budget hotel chain Premier Inn, said that its board

"This transaction is great news for shareholders as it recognises the strategic value we have developed in the Costa brand and its international growth potential and accelerates the realisation of value for shareholders in cash," Whitbread's chief executive

One of the main drivers of the deal, Brittain said is that "they [Coca-Cola] want the coffee product, they have no coffee in their range." Brittain went on to say that Coca-Cola plans to sell Costa branded

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