Coca‑Cola in last‑ditch talks with TDR Capital to salvage Costa Coffee sale

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Coca‑Cola is holding urgent negotiations with private equity firm TDR Capital in an effort to rescue the potential sale of Costa Coffee, which now appears in jeopardy due to disagreements over valuation and deal terms.

TDR Capital — owner of UK supermarket chain Asda — was recently chosen as Coca‑Cola’s preferred bidder for Costa, but talks have stalled over price expectations, according to people familiar with the discussions. The deal under consideration would see Coca‑Cola retain a minority stake in the British coffee chain while TDR takes majority control.

Coca‑Cola originally acquired Costa Coffee from Whitbread in 2018 for roughly $5.1 billion (~£3.9 billion). In recent months, the company has been evaluating strategic options for the brand — including a full or partial sale — amid underperformance and competitive pressure in the coffeehouse sector. The potential transaction was expected to fetch around £2 billion, but disagreements over price have made that figure uncertain and led to last‑minute negotiations.

Investment bank Lazard has been advising Coca‑Cola on the process, which has also attracted interest from other private‑equity firms in the past, though some have since dropped out. If TDR and Coca‑Cola cannot bridge their valuation gap, the sale process could be shelved entirely, with a final decision anticipated in the coming week.

Costa Coffee remains a globally recognised brand with a sizeable footprint in the UK and other markets. The outcome of these negotiations will be closely watched by industry analysts, as it may signal broader shifts in how beverage and hospitality companies manage non‑core assets in a tougher economic environment.