Coca-Cola Will Acquire Coffee Chain Costa for $5.1 Billion

In an effort to move to healthier options, much like how PepsiCo did by saying it will buy Sodastream, Coca-Cola made its own big announcement this week.

The beverage giant will be buying Britain’s coffee company Costa for $5.1 billion.

The Whitbread board anonymously voted yes and said it was to be in the best interests of shareholders. Whitbread had acquired the coffee chain in 1995 for £19 million, when it had only 39 shops.

Coca-Cola CEO James Quincey, who is also British, said Costa would provide an important growth platform ranging from beans to bottled drinks in what is one of the world’s fastest-growing drink categories, growing 6 percent.

“Coca-Cola doesn’t have a broad, global portfolio in this growing category,” Quincey remarked.

“This is very consistent in our strategy, diversifying the total beverage portfolio,” Quincey said to CNBC’s Sara Eisen in an interview, “Clearly coffee is an area where we didn’t have a play.”

“There’s a lot of coffee stores in the U.S.,” he said. “There’s more room for growth in Europe and Asia.” He added that the company may open more stores in Asia, through franchise or partners.

“This is a coffee strategy, not a retail strategy or a food strategy,” said Quincey.

Disclaimer: We have no position in The Coca-Cola Co (NYSE: KO) and have not been compensated for this article.