Reports note that while a sale is not a confirmation, indicative offers are expected in early autumn
United States soft drinks major Coca-Cola is exploring the potential sale of British coffee chain Costa. The company is working with investment bank Lazard to review options, Reuters reported. The company has conducted preliminary discussions with a small number of potential bidders for Costa.
The potential bidders included private equity firms, as per the report, which added that while a sale is not a confirmation, indicative offers are expected in early autumn. The report emphasised that Coca-Cola acquired Costa Coffee for over USD five billion in 2018. The move was aimed at boosting its competitiveness and taking on Starbucks and Nestle.
The report noted that the likely sale of Costa Coffee would add onto the wave of dealmaking in the packaged food space, which has seen healthy growth as the players are looking to scale. Coca-Cola is of the view that its investment in Costa is not where it wanted it to be from an investment hypothesis point of view, the report added.
Food companies are looking at healthier substitutes as they respond to the health secretary’s Make America Healthy Again campaign. The company has agreed to use real cane sugar in the United States. Reuters reported. The report highlighted that the company is thinking about how it might want to look at new avenues to grow in the coffee category.
