Apollo Global Management Withdraws Bid For Costa Coffee – CoffeeTalk

American private equity firm Apollo Global Management has ended its pursuit of Costa Coffee, citing failed early-stage talks with Coca-Cola, the owner of the high street coffee chain. The company, which owns The Restaurant Group, Wagamama’s parent company, had fewer proposals than initially expected, but TDR Capital, which also owns Asda and David Lloyd Leisure, was still thought to be interested. The value placed on Costa could be as low as £1.5 billion, a significant discount from the £3.9 billion paid for the company in 2019.

Coca-Cola put Costa up for sale last month, appointing bankers at Lazard to advise on a potential sale. The move came after Coca-Cola singled out the coffee chain as a poor performer in its annual results, with coffee sales declining every quarter in 2024 and amid broader challenges in the casual dining sector. James Quincey, the chairman and chief executive of Coca-Cola, said in an earnings call in August that the coffee chain “is not where we wanted it to be from an investment-hypothesis point of view.”

Costa Coffee was founded in 1971 by the brothers Bruno and Sergio Costa when they set up a coffee roastery in Lambeth, south London. They sold the company to Whitbread, the Premier Inn owner, for £19 million in 1995, and after pressure from activist investors, Costa was sold to Coca-Cola for a much higher-than-expected price of £3.9 billion. Coca-Cola bought Costa with the intention of transforming itself into a “total beverage company” by strengthening its position in the global coffee market and reducing its reliance on carbonated drinks.

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