Coca-Cola is preparing to sell Costa, Britain’s largest coffee chain, six years after buying the business in a bid to reduce its reliance on sugary soft drinks, SkyNews reported.
Costa has more than 2,000 stores in the UK and more than 3,000 worldwide, according to the latest figures.
Coca-Cola is working with bankers to hold preliminary talks on selling Costa, the publication said. Initial discussions have already taken place with a small number of potential buyers, including private equity firms.
Investment bank Lazard has been hired by the company to analyse options for the business and gauge interest from potential buyers.
Indicative offers are due to be submitted in early autumn. However, one SkyNews source warned that Coca-Cola could still decide not to proceed with the sale.
Analysts have said the sale could result in a multi-billion-pound loss on the £3.9bn Coca-Cola agreed to pay to acquire Costa from Whitbread, the owner of the London Stock Exchange-listed Premier Inn hotel chain, in 2018.
One SkyNews source said Costa could now be worth just £2bn in the sale.
Costa’s financial statements, filed with Companies House, show that in 2023 — the latest year for which separate results are available — the coffee chain recorded revenue of £1.22bn.
While that’s up 9% on the previous year, it’s down from the £1.3bn it recorded in 2018, the last year before Coca-Cola took control of the business.