The proposed sale of Costa Coffee by Coca-Cola is reportedly at risk of collapsing, with the soft drinks giant holding last-ditch talks with private equity firm TDR Capital this weekend. Sources told the Financial Times that Coca-Cola holds discussions to try to salvage the deal.
TDR Capital was selected as Coca-Cola’s preferred bidder earlier this week, but negotiations have reportedly stalled over price. The deal reportedly includes Coca-Cola retaining a minority stake in the British coffee chain.
In August, Coca-Cola held initial talks with several potential bidders, including private equity firms, while working with investment bank Lazard to explore options for Costa Coffee. Lazard’s review reportedly considered a full or partial sale of the company.
Coca-Cola acquired Costa Coffee in 2018 from Whitbread Plc for an enterprise value of $5.1 billion. The acquisition aimed to strengthen Coca-Cola’s push into the global coffee market and compete with major rivals like Starbucks and Nestlé.
Costa Coffee currently operates in over 50 countries, with more than 2,700 stores in the UK and Ireland, and over 1,300 additional outlets globally. The chain has become a central part of Coca-Cola’s strategy to diversify into healthier beverages and premium coffee offerings.
Despite these plans, sources said that Coca-Cola holds talks with TDR this weekend as a last attempt to reach an agreement. If the deal falls through, Coca-Cola may reconsider its approach, with the possibility of retaining Costa Coffee entirely.
Analysts say the sale of Costa Coffee could help Coca-Cola focus on its core beverage business while continuing to participate in the growing global coffee sector. However, the disagreement over price highlights the challenges of such high-profile transactions.
For now, Coca-Cola holds its position, working with potential buyers and advisors to determine the best path forward for Costa Coffee. The outcome of the weekend talks could decide whether the proposed sale proceeds or collapses.
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