The soft drinks giant is ended talks with remaining bidders for Costa in December, ending an auction process lasting several months, according to the Financial Times (FT).
Investors in the latter rounds of negotiations included Stonegate owner TDR Capital and Bain Capital’s special situations fund, owner of the bakery chain Gail’s and PizzaExpress.
The FT had previously reported that Coke had been seeking about £2bn for Costa, which has more than 2,700 sites across the UK and Ireland, roughly half the £3.9bn it paid to acquire the UK’s largest coffee shop chain from Premier Inn owner Whitbread in 2018.
Private equity firms Apollo, KKR and Centurium Capital, owner of China’s Luckin Coffee chain, had been involved at earlier stages of the process, which was handled by Lazard.
Under Coke’s ownership Costa has found itself competing with more upmarket independent coffee shops and brands such as Blank Street, that have tapped into the growth of more drinks such as matcha, as well as cheaper rivals such as Greggs.
It has also experienced lower footfall over the past 12 months.
Coca-Cola’s chief operating officer Henrique Braun will replace James Quincey as its chief executive in March. Quincey, who admitted to analysts last July that Costa had ‘not delivered’ for Coke, will become the company’s executive chair.