Coca-Cola To Buy Costa Coffee Brand From Whitbread For $5.1 Bln - Quick Facts

(RTTNews) - Coca-Cola Co. (KO) announced Friday that it has reached a definitive agreement to acquire coffee brand Costa Limited from parent company Whitbread Plc (WTB.L) in a deal valued at 3.9 billion pounds or $5.1 billion.

Whitbread will be seeking shareholder approval for the transaction, which is expected to take place by mid-October. The deal is subject to customary closing conditions, including antitrust approvals in the European Union and China. It is expected to close in the first half of 2019.

Coca-Cola expects the transaction to be slightly accretive in the first full year, not taking into account any impact from purchase accounting.

The acquisition is expected to give Coca-Cola a strong coffee platform across parts of Europe, Asia Pacific, the Middle East and Africa, with the opportunity for additional expansion.

The acquisition will expand the existing Coca-Cola coffee lineup. The portfolio already includes Georgia brand in Japan, plus coffee products in many other countries.

Costa was founded in London in 1971 and has grown to become a major coffee brand across the world. Costa operations include nearly 4,000 retail outlets with highly trained baristas, a coffee vending operation, for-home coffee formats and Costa's state-of-the-art roastery.

For the fiscal year 2018, Costa generated revenue and EBITDA of 1.3 billion pounds and 238 million pounds, respectively. This equates to roughly $1.7 billion in revenue and $312 million in EBITDA.

Because Coca-Cola expects the transaction to close in the first half of 2019, there is no change to 2018 guidance. The company's long-term targets also remain unchanged.