The sale of Costa will see a £500m share buyback programme triggered which will see “a significant majority of the net proceeds to shareholders”. The deal is worth 16.4 times Costa’s EBITDA for the 2018 financial year, with it representing Coca-Cola’s first move into the hot drinks market.
Whitbread chief executive Alison Brittain, said: “I am delighted that we have agreed the sale of Costa to Coca-Cola for £3.9b. 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.”
Coca-Cola CEO James Quincey said that the deal gave the soft drink giant “new capabilities and expertise in coffee” adding that it wanted to “grow the Costa brand worldwide”.