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Coca-Cola May Abandon Costa Coffee Sale
15 Dec
Summary
- Coca-Cola faces pricing disagreements with TDR Capital.
- Sale of Costa Coffee for $2.5 billion is now at risk.
- Costa Coffee reported a loss of £13.8 million in 2023.
Disagreements over pricing have cast a shadow over Coca-Cola's planned sale of Costa Coffee to private equity firm TDR Capital. The deal, which was nearing finalization, is now at risk of collapse as both parties fail to agree on the valuation. Coca-Cola is slated to make a definitive decision on the sale's future next week.
The coffee chain, acquired by Coca-Cola in 2018 for approximately $5 billion, was being divested with Coca-Cola targeting around $2.5 billion in proceeds. However, Costa has struggled against intense competition and rising costs, reporting a substantial £13.8 million loss in 2023 on £1.2 billion in revenue.
Should the sale fall through, Coca-Cola may miss a crucial opportunity to recover a significant portion of its initial investment. For Costa Coffee, this would mean continued operational challenges without the anticipated capital injection needed to navigate a competitive market.
