Coca-Cola halts sale of Costa Coffee after private equity bids fall short
Coca-Cola has paused plans to divest Costa Coffee after private equity offers failed to meet valuation expectations.
UK – Coca-Cola has reportedly abandoned plans to sell its Costa Coffee chain after bids from private equity firms came in below expectations, according to the Financial Times.
Citing people familiar with the matter, the report said the US-based beverage giant ended talks with remaining bidders in December, bringing a months-long auction process to a halt.
Firms in advanced discussions included Asda-owner TDR Capital and Bain Capital’s special situations fund, which owns Gail’s and PizzaExpress. Earlier stages of the process involved private equity groups Apollo, KKR and Centurium Capital.
According to the report, discussions with TDR Capital would have involved Coca-Cola retaining a majority stake in Costa Coffee. However, negotiations did not progress to a final agreement. While the company has paused the sale process, Coca-Cola could revive plans to divest Costa in the medium term.
The decision comes as Coca-Cola prepares for a leadership transition, with Henrique Braun set to replace James Quincey as chief executive in March. Costa Coffee operates more than 2,700 outlets across the UK and Ireland.
Coca-Cola first announced its intention to divest Costa Coffee in August 2025. At the time, Quincey said the business had “not quite delivered” and was “not where we wanted it to be from an investment hypothesis point of view.”
The company acquired Costa Coffee in 2018 for an enterprise value of US$5.1 billion to expand its presence in the global coffee market, where it competes with rivals such as Starbucks and Nestlé.
Costa Coffee’s recent financial performance has been weak. In 2024, operating losses more than doubled to £13.5 million (US$18.15 million), while revenues stood at £1.2 billion (us$1.6 billion). The company attributed the results to weak high street footfall and increased competition from lower-priced rivals.
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