Coca-Cola considers grounds for sale of Costa
Soft drinks giant Coca-Cola has called in bankers for exploratory talks regarding a sale of coffee chain Costa.
The Coca-Cola company, which acquired Costa over six years ago, has held talks with a number of potential bidders including private equity firms, according to Sky News.
Investment bank Lazard is working with the firm to explore demand from prospective buyers.
A deal would mark the sale of Britain’s biggest high street coffee chain. Coca-Cola purchased Costa on January 3 2019 after sealing an agreement with FTSE 100 giant Whitbread worth £3.9bn.
Preliminary offers are set to be tabled in the early Autumn though the soft drinks maker could still decide to ditch a sale.
But analysts told Sky News, a sale could mark a major loss for Coca-Cola with Costa’s estimated price tag to be nearly half that paid in 2019.
Though this would not make a dent to the drinks giant, which reported net revenues of near £47bn for 2024 – up three per cent from the previous year.
Trouble brewing for Costa
Costa fell into the red in its latest financial year according to accounts filed with Companies House.
The firm made a loss of £9.6m in 2023, even as revenue increased to £1.22bn from £1.11bn.
It followed the coffee chain sealing a pre-tax profit of £245.9m in 2022.
The business cited “inflationary pressures on the cost of goods, including energy and payroll, and the impairment of the company’s investments in two of its subsidiaries resulted in an operating loss for the year.”
Net finance costs reached £5m for the period and its dividend income was slashed from £1m from £245m.
During the year the average number of people employed by Costa Coffee increased from 17,344 to 17,809.
The firm has over 2,000 stores across the UK with over 3,000 globally.