British hospitality company Whithead Plc on Friday said it has agreed to sell coffee chain Costa Coffee to Coca-Cola for £3.9 billion (Rs 36,014 crore). Whithead Plc said in a media release that it had judged the sale to be “in the best interests of shareholders”.
The company said net cash proceeds from the transaction are expected to be around £3.8 billion (Rs 35,100 crore), after deducting estimated transaction costs and separation costs. “A significant majority” of the proceeds will be given to the shareholders, the firm added.
However, the proposed sale has to get the approval of Whithead’s shareholders, as well as permission from anti-trust watchdogs, the firm said. It expects the transaction to be completed in the first half of 2019. “This transaction is great news for shareholders as it recognises the strategic value we have developed in the Costa brand and its international growth potential,” Whithead Chief Executive Officer Alison Brittain said.
“Costa gives Coca-Cola new capabilities and expertise in coffee, and our system can create opportunities to grow the Costa brand worldwide,” Coca-Cola President James Quincey said. “Hot beverages is one of the few remaining segments of the total beverage landscape where Coca-Cola does not [yet] have a global brand.”
Whithead had acquired Costa Coffee in 1995 for £19 million (Rs 1.75 billion), when the chain had only 39 stores in the United Kingdom.
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