Coca-Cola’s talks to sell Costa Coffee risk stalling over valuation
The talks were seen as a last-ditch attempt to offload the coffee chain after the Atlanta-headquartered beverages giant began exploring strategic options earlier this year
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Coca-Cola’s proposed sale of Costa Coffee is at risk of collapsing after negotiations with private equity firm TDR Capital stumbled over valuation, the Financial Times reported.
The talks were seen as a last-ditch attempt to offload the coffee chain after the Atlanta-headquartered beverages giant began exploring strategic options earlier this year. In August, Coca-Cola hired investment bank Lazard to sound out interest and held preliminary discussions with a small group of potential bidders.
Coca-Cola acquired Costa Coffee in 2018 from Britain’s Whitbread Plc for an enterprise value of $5.1 billion, marking its biggest deal at the time as it sought to expand beyond carbonated soft drinks into coffee and other “healthier” beverage categories.
Costa Coffee currently operates in around 50 countries, with more than 2,700 outlets across the UK and Ireland and over 1,300 stores in international markets, according to the company’s website.
Despite the uncertainty around a potential sale, Costa’s India business has continued to post strong growth. Revenue from operations in India rose 30.76% year-on-year to Rs 198.5 crore in FY25, while profit increased 28.4% to Rs 149.7 crore.
In India, Costa Coffee is operated by Devyani International Ltd, which runs about 220 outlets. For the financial year ended March 31, 2024, the India business reported revenue of Rs 151.8 crore and profit of Rs 116.6 crore.
