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Proposed sale of Costa to Coca-Cola

31 Aug 2018 Financial & business

Whitbread PLC (“Whitbread” or the “Group”) is pleased to announce that it has entered into an agreement for the sale of Costa Limited (“Costa”), one of the world’s leading coffee brands, to The Coca-Cola Company (“Coca-Cola”), for an enterprise value of £3.9 billion (the “Transaction”).

Transaction highlights

  • Sale of Costa for an enterprise value of £3.9 billion, representing a multiple of 16.4x Costa FY18 EBITDA
  • Recognises strategic value of Costa’s brand strength, multi-channel presence and international growth potential
  • Substantial premium to the value that would have been created through the previously announced demerger given the Coca-Cola system’s global product, distribution and vending platform
  • Transaction unanimously agreed by Whitbread Board to be in the best interests of shareholders
  • Net cash proceeds expected to be approximately £3.8 billion at completion, after adjusting for estimated transaction costs and separation costs
  • A significant majority of net cash proceeds intended to be returned to shareholders
  • Whitbread will also reduce financial indebtedness and make a contribution to the pension fund, which will both provide headroom for further expansion of Premier Inn in the UK and Germany
  • The Transaction is conditional upon agreement by Whitbread’s shareholders and various other approvals, including anti-trust approvals, and is expected to complete in the first half of 2019
  • Whitbread to focus on the attractive structural growth opportunities for its leading hotel business, Premier Inn, in the UK and Germany

Alison Brittain, Whitbread Chief Executive, commented:

“I am delighted that we have agreed the sale of Costa to Coca-Cola for £3.9 billion. 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 and accelerates the realisation of value for shareholders in cash. The announcement today represents a substantial premium to the value that would have been created through the demerger of the business and we expect to return a significant majority of net proceeds to shareholders. Whitbread will also reduce debt and make a contribution to its pension fund, which will provide additional headroom for the expansion of Premier Inn.

The sale of Costa to Coca-Cola is another successful landmark in the 276-year history of Whitbread. Whitbread acquired Costa in 1995, for £19 million when it had only 39 shops and successfully grew the business to be the UK’s favourite and largest coffee shop company. In more recent years, we have been focused on building Costa into a leading multi-channel, international coffee brand. This has resulted in this unique strategic opportunity to combine the Costa brand with Coca-Cola’s global scale, product and distribution capabilities. This combination will ensure new product development, continued growth in the UK and more rapid expansion overseas. As a result of this strategic sale our teams, pensioners, suppliers, shareholders and other stakeholders will all have the opportunity to share in the benefits.

Premier Inn, the UK’s leading hotel business, will continue to develop its highly successful and unique business model, with even greater focus and financial investment. Premier Inn will continue to take advantage of the considerable structural growth opportunities in the UK and accelerate its network expansion in Germany. This will deliver strong return on capital and significant value to shareholders over the long term.”

James Quincey, Coca-Cola President & CEO, commented:

“Costa gives Coca-Cola 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. I’d like to welcome the team to Coca-Cola and look forward to working with them.”

Investor & analyst briefing

The management of Whitbread will be hosting a briefing today commencing at 9.00am (BST) to discuss today’s announcement. The webcast can be accessed directly at A conference call facility is also available (Dial-in: +44 20 3936 2999 | PIN: 984274). The webcast can also be accessed via the Investor Relations section of Whitbread’s website (, with an on-demand replay available later today.

This announcement contains inside information.

For more information please contact:

Investor queries

Matt Johnson, Whitbread PLC | | +44 (0) 7848 146 761
Ann Hyams, Whitbread PLC | | +44 (0) 7796 709 087

Media queries

Andrew Grant / David Allchurch / Jessica Reid, Tulchan Communications | +44 (0) 20 7353 4200

For photographs and video please visit Whitbread’s media library at

Goldman Sachs International (“Goldman Sachs”) and Morgan Stanley & Co. International plc (“Morgan Stanley”) are acting as joint financial advisers and joint sponsors to Whitbread. Deutsche Bank AG, acting through its London branch (“Deutsche Bank”) is acting as financial adviser to Whitbread. Morgan Stanley and Deutsche Bank are acting as corporate brokers to Whitbread. Slaughter and May is acting as legal adviser to Whitbread.


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