Disagreements Over Pricing Threaten Coca-Cola's Planned Sale Of Costa Coffee

Benzinga·12/14/2025 19:38:28

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Coca-Cola (NYSE:KO) and private equity firm TDR Capital are in urgent discussions following a potential disruption of Coca-Cola’s planned sale of Costa Coffee.

What Happened: Previously, TDR Capital, the owner of Asda, was selected by Coca-Cola as the preferred bidder for Costa after a board meeting in New York.

However, the deal is now at risk due to disagreements over the pricing. Coca-Cola is set to decide next week whether to continue with or abandon the sale process, reports The Financial Times.

The current deal stipulates that Coca-Cola will retain a minority stake in Costa. To facilitate the completion of the deal, the size of this stake could be increased.

Coca-Cola had targeted proceeds of about $2.5 billion from the sale of Costa, the coffee chain it acquired from Whitbread in 2018 for roughly $5 billion.

Also Read: If Luckin Makes A Move For Coca Cola’s Costa, Starbucks Could Face A Serious Challenge

Costa has been facing stiff competition from independent operators and mass-market rivals, which, along with rising costs, have pushed the business into the red. In 2023, Costa reported an annual loss of £13.8mn on revenues of £1.2bn.

TDR, which co-owns EG Group, has shown interest in acquiring Costa’s UK and international business, excluding its operations in China. Other potential bidders included Bain Capital, Centurium Capital, and private capital firms Apollo and KKR, but the latter two have withdrawn from the process.

Why It Matters: The potential collapse of the sale could have significant implications for both Coca-Cola and Costa Coffee. For Coca-Cola, it could mean a missed opportunity to recoup a substantial portion of its initial investment in Costa.

For Costa, it could mean continued struggles in a competitive market without the anticipated infusion of capital from the sale.