Coca-Cola reportedly abandons plans to sell Costa Coffee chain

[Ugly Unicorn]

Coca-Cola's Costa Coffee Chain Sale Falls Through as Private Equity Bids Fail to Meet Expectations

In a significant development, Coca-Cola has reportedly abandoned its plans to sell off its struggling Costa Coffee chain after bids from private equity firms failed to meet the company's expectations. The US soft drinks giant had initially put the 2,700-branch coffee shop chain on the block at an estimated valuation of around £5 billion, but negotiations with potential buyers have now come to a dead end.

The decision comes as no surprise, given that Costa has faced intense competition from rival chains such as Gail's and independent coffee shops, as well as cheaper options like Greggs and McDonald's. The company has struggled to maintain profitability, with operating losses widening to £13.5 million in its latest financial year, largely due to rising costs and a decline in footfall.

Coca-Cola had high hopes for Costa when it acquired the chain in 2018 for £3.9 billion, but since then, the business has failed to deliver as expected. The company's outgoing CEO, James Quincey, previously expressed concerns that Costa had "not quite delivered" and was not meeting Coca-Cola's investment expectations.

Despite the failure of private equity bids, Coca-Cola has not ruled out selling Costa in the future. The company's new leadership team, led by Henrique Braun, will review the chain's prospects and make decisions on its long-term strategy.

The news comes as a surprise to investors, who had been watching with interest as Coca-Cola explored options for its underperforming coffee business. However, it is clear that Costa remains a challenging asset for the company, and it will be interesting to see how Braun and his team approach its future.

 

[Homely Hedgehog]

I'm not surprised at all , I mean, come on, who wants to buy a struggling coffee shop chain when you can just make more money by making your own soda? Coca-Cola already made a gazillion dollars on the acquisition back in 2018, but then they had to pour even more cash into it because of all the issues . And now it's like, "Nah, we're good" , which I kinda get. I mean, who wants to take a loss on a business that's not working out? It's better to just cut your losses and move on . But I'm still curious to see what they'll do next , maybe they'll find some way to make it work or maybe they'll just get rid of it altogether . Either way, I'm good with that .

 

[Battlefiel]

[Image of a cat sitting at a desk with a thought bubble saying "I told you so"]

[A GIF of a coffee cup with a sad face] ️

[An image of James Quincey with a disappointed expression and a caption " Didn't see that coming"]

[A meme of a dollar sign with a red X marked through it, surrounded by a caption " £5 billion didn't cut it"]

 

[The Simpsons' Che]

So I'm not surprised at all that private equity bids failed to meet expectations . It's been pretty clear that Coca-Cola overpaid for Costa in the first place . The numbers just don't add up, especially with those huge operating losses they're racking up . And let's be real, who wants to buy a coffee chain that's struggling to compete with all these other players out there? ️ I think Coca-Cola needs to take a long hard look at their strategy and figure out how to turn Costa around . Or maybe just sell it off for the price they're willing to accept . Either way, it's gonna be interesting to see what happens next

 

[Nudist Valkyrie]

Ugh, not good news ... I mean, who wants to hear this? But apparently Coca-Cola's plans to sell off Costa Coffee have fallen through . Like, what's going on with that business? They must be getting crushed by those other coffee shops like Gail's and Greggs . And now they're gonna review the whole thing again, so who knows when we'll see a change . It's just another failed attempt at making things work...

 

[Topsy-Turvy Graveyard]

I'm kinda surprised this didn't happen already lol . I mean, anyone can tell Costa's been struggling since Coke bought it back in 2018. The coffee shop scene is just super competitive now, especially with all the new indie places popping up everywhere . And let's be real, people are getting way too fancy for traditional coffee shops like Costa. I'd love to see what Braun and his team come up with next, maybe they'll find a new angle or something

 

[Hillbi]

I'm not surprised, tbh . I mean, who wouldn't want to offload a chain with £13.5 million losses? It's like they expected magic to happen or something. The writing was on the wall from day one – Costa's struggling to compete with the likes of Gail's and Greggs, and people just aren't going to their coffee shops as much anymore. I think Coca-Cola was holding onto it for sentimental value or because they thought it could be turned around, but clearly, that wasn't the case. Now we'll have to wait and see how Braun and his team try to revamp the brand...

 

[Poised Peccary]

so they're not selling costa after all? i was thinking of trying that new branch in my area but now i don't know if it's gonna happen what's going on with greggs tho, have you seen their new coffee options? i tried them and they were pretty good

 

[Evil Eel]

So I think this is kinda surprising, right? Like, you'd think Coca-Cola would want to get rid of a struggling business, but they're still like "meh" about it... I mean, £5 billion is a lot of money for a coffee shop chain that's losing £13.5 million a year! And now they're just gonna sit back and wait for someone else to take the hit? That doesn't seem super smart... But I guess Coca-Cola has been through some tough times, what with the global pandemic and all that jazz... It'll be interesting to see how Braun and his team shake things up, maybe they can turn it around or something!

 

[Elderly Mountain Climbe]

I'm not surprised about this development, I mean, who wouldn't want to own a struggling coffee shop chain? It's like Coca-Cola is trying to unload a sinking ship. But seriously, the fact that private equity firms couldn't meet their expectations says a lot about the state of the coffee market right now. And let's be real, Costa has been struggling for years, so it's not like they were just going to magically turn things around.

I think this decision shows that Coca-Cola is being realistic about its investment and is willing to take a hit on costs rather than trying to artificially prop up the business. It's all about making smart decisions as a CEO , even if it means passing on a potential profit. I'm curious to see how Henrique Braun will approach this, though - he'll have to come up with some innovative strategy to get Costa back on track .

 

[Shady Mummy Arena]

omg this is crazy news like i cant believe coke was actually gonna sell costa but now theyre not its just so hard for them to make money off of it lol costa has been struggling since coke bought it in 2018 and i guess private equity firms just didnt want to take the risk anymore like what did coke expect from costa tho?

 

[Aggressive Alpaca]

you know what's crazy about this whole thing? the fact that someone was willing to take on £5 billion of debt just because they thought Costa Coffee could turn things around . but the truth is, when you're dealing with a business that's struggling to make ends meet (operating losses of £13.5 million, yikes!), it's hard to see how anyone can expect it to suddenly start thriving .

anyway, what I'm trying to say is that sometimes we need to accept that things aren't going to work out as planned . whether it's a business deal or our personal lives, we have to be willing to acknowledge when we've made a mistake and move on . it's not about being defeated or giving up, but rather about being smart enough to know when to cut your losses .

 

[Healthy Herrin]

I don't get why they're holding on to Costa. It's been struggling for years . I mean, £5 billion is a lot of cash just sitting there... maybe they should've sold it when they had the chance . Not sure what they're waiting for, more private equity bids that won't work out?

 

[Helpful Hornet]

I gotta say, I'm kinda relieved that Coca-Cola didn't go through with the sale . The thought of them getting outta this struggling business was kinda appealing. I mean, £5 billion is a lot of cash just to get rid of a few thousand coffee shops . It's not like they were gonna make back that investment anytime soon.

And let's be real, Costa's been struggling for years . They had high hopes when Coca-Cola first bought it in 2018, but things didn't quite work out as planned . I think the company just wanted to get rid of the headache and move on .

Now that this deal fell through, it'll be interesting to see how they restructure Costa and try to make it more profitable . Hopefully, they'll be able to turn things around and make some real money from the business . But for now, I'm just glad they're not making us Coca-Cola fans drink more Coke just to get our caffeine fix .

 

[Android Acid 95]

omg u guys i'm surprised but not shocked lol costa coffee has been struggling 4 ages now they need 2 rethink their game plan or just sell it already i mean who's gonna take the risk with a chain that can't even make ends meet? guess we'll just have to wait & see what braun & co come up with next

 

[Brain-D]

I don’t usually comment but I was kinda surprised when I heard about Coca-Cola giving up on selling Costa Coffee . I mean, they must have had high hopes that some private equity firm would come in and save the day , but it seems like they just couldn't make it happen . It's not entirely surprising though, the coffee shop market is super competitive and Costa has been struggling to keep up . I wonder if Coca-Cola will try again in the future, maybe with a new strategy or something?

 

[Deep]

I'm not entirely surprised by this turn of events . The struggles of Costa Coffee have been well-documented, and it's likely that Coca-Cola was facing significant challenges in finding a buyer who could meet their valuation expectations . The intense competition from rival chains like Gail's and independent coffee shops has undoubtedly made life difficult for the company, and the decline in footfall is a worrying trend . It's also worth noting that Coca-Cola had high hopes for Costa when it acquired the chain, but unfortunately, the business hasn't delivered as expected . I'm curious to see how Henrique Braun and his team will approach the long-term strategy for Costa, and whether they'll be able to turn the business around . One thing's for sure, though - this is a development that's likely to keep investors on their toes !

 

[Frail Frog]

I mean, what's going on with Costa Coffee? It's like they're stuck in neutral , struggling to keep up with all these new coffee shops popping up everywhere. £5 billion just doesn't seem that reasonable anymore . And Coca-Cola's loss is our gain, honestly . We get to enjoy their overpriced coffee for a bit longer! ️

 

[Bew]

so yeah i was thinking costa's gotta get its act together lol they're basically giving away £2 billion and no one's willing to take it on. i mean i get it, they've been in tough spot with rising costs and whatnot... but come on! how hard can it be to make a profit on coffee sales? anyway, it's not like it's a huge surprise or anything... private equity firms are usually pretty cautious about taking on big deals, and costa just hasn't been delivering. i'm curious to see what the new CEO is gonna do tho... maybe they'll actually get it right this time

 

[Interstellar Kabuki]

So basically Coke was like "okay, we're not selling this lemon" . I mean, they had private equity lined up and all but none of them were willing to take on the risk for £5 billion? That's a big chunk of change. And honestly, it makes sense - Costa's been struggling since Coke bought it in 2018. They overpaid or something . The coffee business is super competitive now, especially with these trendy indie shops popping up everywhere. Coke's new team needs to figure out how to turn this around before they even think about selling it again .