Coca-Cola bought the Costa Coffee chain from Whitbread for £ 3.9 billion
Coca-Cola will buy the Costa Coffee chain from Whitbread from the UK recreation group, in a £ 3.9 billion deal that established the world's biggest beverage maker to take Starbucks, Nestle and JAB Holdings in a global battle for coffee sales.
The FTSE 100 Whitbread Group previously announced it would evolve from Costa, the second largest coffee shop in the world, under pressure from activist investors. Whitbread shares jumped 18 percent after announcing an agreement on Friday.
For Coca-Cola, this transaction is a surge in the global coffee market, where it has a small presence.
James Quincey, Coca-Cola's president and chief executive, said Costa would give the company "new capabilities and expertise in coffee, and our system could create opportunities to develop the Costa brand around the world".
"Hot drinks are one of the remaining segments of the overall beverage landscape where Coca-Cola does not have a global brand.
Coffee has been one of the frothiest markets for mergers and acquisitions over the past year, as competition between the Swiss group Nestlé and JAB Holdings - private investment groups that manage the family wealth of German millionaires, Reimann - have heated up.
The Nestlé transaction includes taking over the majority in blue hipster roastery bottles and obtaining the right to sell Starbucks products, while JAB earlier this year launched an agreement to merge the Keurig Green Mountain coffee business with soft drink producer Dr Pepper Snapple.
The move marked the end of ownership of 23-year-old Whitbread from Costa, who bought the group for £ 19 million when only 39 stores were available. Now has more than 2,400 stores in the UK and 1,400 in more than 30 international markets, and operates an entrepreneurial business.
Costa Coffee has been advancing international development in recent years, especially in China, because it offset the decline in sales on British highways.
Under pressure from hedging funds Elliott Advisors and Sachem Head to take radical steps to tackle growth, Whitbread announced his decision to spin on Costa in April but publicly opposed calls from activist shareholders to begin the sales process.
Alison Brittain, chief executive of Whitbread, said the calculation changed after Coca-Cola made its first approach in June. "We are not interested in selling other than someone who has strategic thinking and will increase the value of [the company]," he said.
He said Coca-Cola, which has $ 35.4 billion in revenue in 2017 and has a market capitalization of more than $ 191 billion, has a global scale and supply chain that will enable Costa to grow and compete with international rivals in a way that is impossible as possible a stand-alone company.
Before Thursday's announcement, Whitbread had a market capitalization of £ 7.3bn, with the company estimating that Costa represented £ 2.3bn of that value. This shows that Coca-Cola's offer represents a premium of around 20 percent of the estimated value of the coffee chain.
As well as returning returns to shareholders, the company said it intended to reduce debt and make contributions to its pension funds - even though he did not provide precise details - in a move he believed would allow him to continue Premier Inn expansion.
This agreement is expected to be closed in the first half of 2019, subject to shareholder agreement and regulations.
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