Coca Cola Company said it will buy British coffee shop chain Costa for $5.1 billion, diversifying further from its soft drink roots, according to a Dow Jones report.
Founded in London in 1971, Costa, a rival to Starbucks Corporation in the UK, has nearly 4,000 stores in 32 countries and also sells coffee in grocery shops and gas stations.
Coke said the purchase would give it a strong position in coffee across parts of Europe, Asia and the Middle East. It already sells some coffee products and owns the Georgia brand in Japan, Efe news reported.
Coffee has recently been a hot industry for M&A. Nestle SA earlier in 2018 bought the rights to sell Starbucks in grocery and retail stores for more than $7 billion.
The acquisition is also the latest sign of how soda makers are diversifying as they look to move beyond sugary pop. It marks the latest bet by a major consumer goods company on coffee.
Coke is buying Costa from British leisure group Whitbread PLC, which also owns the Premier Inn hotel brand in the UK and Germany.
Whitbread’s shares soared 18 per cent in early trading on Friday. It said it expected the deal to be completed in the first half of 2019.