Coca-Cola is again exploring a potential sale of Costa Coffee, reviving efforts to exit the British coffee chain after an earlier sales process failed to produce an acceptable offer.
The company is seeking to unwind an acquisition that originally cost approximately $5.1 billion in 2018, according to a Semafor report cited by Reuters.
Coca-Cola had previously considered selling Costa but abandoned that process earlier this year after offers from private-equity firms reportedly came in below expectations.
The renewed effort suggests the beverage company remains interested in finding an exit despite the valuation difficulties encountered during the first process.
No sale has been agreed, and the price Coca-Cola might seek in a renewed transaction has not been determined.
At least one strategic buyer examined a possible acquisition before deciding not to proceed because of valuation and strategic considerations, according to the report. Coca-Cola had not immediately commented on the latest report.
Costa represented a significant diversification move when Coca-Cola bought the business from Whitbread in 2018.
The acquisition gave Coca-Cola direct exposure to thousands of coffee shops as well as vending machines, packaged coffee and other coffee products at a time when the company was attempting to expand beyond traditional carbonated beverages.
A sale would therefore represent a substantial reversal of that strategy.
The renewed process also illustrates the difficulty large consumer companies can face when attempting to dispose of businesses acquired at premium valuations. Potential buyers must weigh Costa’s global brand and physical store network against operating costs, competitive pressure and the capital required to expand the business.
For Coca-Cola, the central question is whether a strategic buyer or private-equity group will now offer a valuation high enough to justify selling rather than retaining the chain.
Until an acceptable offer emerges, the transaction remains a potential divestiture rather than an agreed sale.
