Coca-Cola has agreed to buy coffee chain Costa for $5.1 billion including debt to extend its push into healthier drinks and take on the likes of Starbucks and Nestle in the booming global coffee market.
The purchase from Britain's Whitbread of Costa's almost 4,000 outlets thrusts the world's biggest soda company into one of the few bright spots in the sluggish packaged food and drinks sector.
Paying about 1 billion pounds ($1.3 billion) more than some analysts had expected, Coke will use its distribution network to supercharge Costa's expansion as it chases current coffee chain market leader Starbucks and its almost 29,000 stores across 77 markets.
Beyond coffee shops, Coca-Cola CEO James Quincey, himself a Briton who is familiar with the Costa brand, said Costa would provide an important growth platform ranging from beans to bottled drinks in what is one of the world's fastest-growing drink categories, growing 6 percent.
"Coca-Cola doesn't have a broad, global portfolio in this growing category," Quincey said, highlighting Costa's retail footprint, roastery, supply chain and Costa Express vending system, which the company plans to expand.