Coca Cola has paid $5.1 billion to buy Costa Coffee chain, the UK’s biggest coffee chain, as the fizzy drinks maker becomes the latest company to tap into the hot market for coffee.
The company said on Friday it will buy the Costa coffee brand from British firm Whitbread in cash.
Alison Brittain, the chief executive of Costa Coffee owner Whitbread said there had been interest from other buyers but Coke’s desire to snap up the 4,000 store chain had led to “an absolutely stonking deal” for the business.
Costa is Britain’s biggest coffee company with over 2,400 coffee shops in the U.K. and another 1,400 in more than 30 countries. It has 460 in China, its second-biggest market.
Coke said coffee is a “fast-growing, on-trend” category but that it is a market in which it has no major international brand. “Costa gives Coca-Cola new capabilities and expertise in coffee,” said James Quincey, chief executive of Coca Cola. “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.”