Key Takeaways
- Sector: Retail.
- Geography: United Kingdom.
Analysis
London, August 28, 2025 – Apollo Global Management is reportedly in early-stage discussions to acquire Costa Coffee from The Coca-Cola Company. The proposed sale, still in its preliminary stages, could value the UK-based coffee giant at around £2 billion – a significant drop from the £3.9 billion Coca-Cola paid in 2018.
Costa Coffee is the UK’s largest high-street coffee brand, with over 2,000 outlets domestically and more than 3,000 globally. It operates across markets including India, Japan, Mexico, and Poland, and manages an expansive international network of Costa Express vending machines.
KKR also expressed interest by engaging with Coca-Cola’s advisor Lazard, but is not expected to submit a formal offer. The sale process, according to sources, remains early, with no final bids due for several weeks. Coca-Cola has yet to comment publicly.
Coca-Cola originally acquired Costa as part of a strategy to diversify beyond carbonated drinks and establish a global footprint in the growing coffee category. However, the business has underperformed since the acquisition. In 2023, Costa generated £1.22 billion in revenue, up 9% year-on-year but still below 2018’s pre-acquisition high of £1.3 billion.
CEO James Quincey recently acknowledged challenges during an earnings call, stating Coca-Cola is "reflecting on what we've learned" and looking for "new avenues to grow in the coffee category" while running Costa efficiently. The company may now pursue a strategic divestment to unlock value.
Founded in 1971 by Italian brothers Sergio and Bruno Costa and acquired by Whitbread in 1995 for just £19 million, Costa has grown into one of the UK's biggest private-sector employers. Its competitors include Starbucks, Caffè Nero, and Pret A Manger – the latter of which is also exploring a stake sale and potential IPO. Meanwhile, premium competitors such as Gail’s Bakery are gaining traction in affluent urban areas.
Should Apollo proceed, the deal would add another high-profile food and beverage brand to its portfolio, following its previous acquisitions in the hospitality sector. A sale to Apollo would mark one of the largest coffee chain divestitures in Europe since JAB Holdings acquired Pret A Manger in 2018.
Coca-Cola’s retreat from Costa could also signal a broader pivot, as beverage giants increasingly reassess non-core assets to focus on faster-growth categories like energy drinks, health beverages, and alcohol alternatives.
For now, Costa’s future ownership remains uncertain — but its sale will likely reshape the competitive dynamics in the global coffee market