Coca-Cola Faces Potentially Massive Losses Over Costa Coffee Sale – CoffeeTalk

Coca-Cola is engaged in advanced discussions with private equity firm TDR Capital regarding the sale of Costa Coffee, following a breakdown in initial price negotiations. Having chosen TDR as the preferred bidder, Coca-Cola aims to sell Costa for approximately £2 billion, which is significantly lower than the £3.9 billion it paid to acquire the brand from Whitbread in 2018. Costa Coffee has been underperforming, reporting a loss of £13.8 million against £1.2 billion in sales for 2023, attributed to rising costs and intensified competition.

Coca-Cola intends to divest Costa’s UK business and most of its international operations while retaining a minority stake. This strategy could potentially facilitate a financial rebound for Coca-Cola, freeing up funds for its main beverage operations. Concurrently, Coca-Cola is undergoing leadership changes, with Henrique Braun set to become CEO in March 2026, taking over from James Quincey, who will transition to executive chairman. Braun’s leadership may begin with either a revitalized Costa or a struggling entity, highlighting a pivotal moment for the company.

When Coca-Cola acquired Costa, the deal was seen as a rapid entry into the coffee market. However, current dynamics reveal a stark contrast. The suggested sale price of £2 billion indicates a substantial depreciation compared to the original acquisition cost. TDR’s interest lies in utilizing Costa’s retail outlets in conjunction with its other business ventures, notably Asda and EG Group, aiming for operational efficiencies. Although Bain Capital and Centurium Capital have shown interest in the bidding process, major players like Apollo and KKR have withdrawn.

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