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    Friday, August 31, 2018

    Coca-Cola To Buy Coffee Chain Costa For £3.9bn

    Coca Cola has agreed to buy the UK chain Costa Coffee for £3.9 billion ($5.1 billion) to gain a global brand to expand in hot drinks.
    Whitbread to sell Costa at a price that’s 16 times this year’s earnings before interest, taxes, depreciation and amortization, the companies said in a statement Friday.

    James Quincey, Coca-Cola president and chief executive said that Costa would give the company, “new capabilities and expertise in coffee and our system can create opportunities to grow the Costa brand worldwide”.
    “Hot beverages is one of the few remaining segments of the total beverage landscape where Coca-Cola does not have a global brand. Costa gives us access to this market through a strong coffee platform.”

    Whitbread had previously announced it would spin off Costa from the rest of its business, which is focused on the faster-growing Premier Inn hotel brand, after coming under pressure from activist investors.
    A “significant majority” of the net cash proceeds of around £3.8bn from the deal will be returned to shareholders, Whitbread said.
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