Coca-Cola calls off Costa Coffee sale after private equity firms give chain a lukewarm reception
The soft drinks giant was said to be selling Costa for £2billion
Coca-Cola has reportedly ditched its plan to sell Costa Coffee after talks stalled with private equity bidders.The soft drinks giant was said to be selling Costa for £2billion – half of the original £3.9billion it paid to buy it in 2018 from previous owner Whitbread.It had attracted high-profile bidders including TDR Capital and Bain Capital, the investment firm behind Gail's and Pizza Express.But even at a reduced valuation, Coca-Cola ended talks after bids fell short of expectations, the Financial Times reported.Apollo, KKR and Centurium Capital were reportedly involved in the early stages of talks, while talks over a deal with Asda owner TDR would have seen Coca-Cola retain a minority stake in Costa. Lukewarm: Coca-Cola has ditched plans to sell Costa after talks collapsed with private equityFocus on fizzy drinks - not lattesCosta, which has more than 2,700 stores in the UK and Ireland, has struggled in the face of waning demand and stiff competition from cheaper rival Greggs.It has also been challenged by a new wave of challengers, such as Blank Street and Black Sheep Coffee, which appeal to younger consumers.In its latest accounts, Costa's losses more than doubled from £5.8million in 2023 to £13.5million in the year to December 2024. Sales rose 1 per cent to £1.2billion over the same period.In July, Coca-Cola boss James Quincey, who will soon be replaced by Henrique Braun, admitted the investment in the chain had 'not quite delivered' and was 'not where we wanted it to be'.Dan Coatsworth, head of markets at AJ Bell, said that while Costa 'has gone off the boil', Coca-Cola 'will be reluctant to sell it for beans.'We're in an era where companies are focusing on what they do best, and for Coca-Cola that means fizzy drinks rather than lattes.'It always felt like Costa was low down the priority list for Coca-Cola, left to go cold like an undrunk cappuccino. 'It will now have to give the brand more love if it is to stand any chance of getting a more reasonable takeover offer.'The FT reported that the failure of a sale could force Coca-Cola to write down the value of Costa on its books.DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you
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Coca-Cola calls off Costa Coffee sale after private equity firms give chain a lukewarm reception
