The news that KKR & Co is in renewed talks to acquire Costa Coffee represents a significant development in the global hospitality and consumer-brand space. The focus keyword Costa Coffee takeover reflects this deal’s potential to reshape ownership of a prominent coffee chain and signals broader investor interest in lifestyle and food-service assets.
In this article we’ll unpack five key facts about the Costa Coffee takeover, the background of Costa’s ownership, why KKR is interested, what valuation is emerging, and what it all means for stakeholders.
Background: Costa Coffee and its parent’s strategy
Costa Coffee was founded in London in 1971 and over decades grew into a major international coffee-chain brand
In 2018-2019, The Coca-Cola Company acquired Costa Coffee from Whitbread PLC for approximately US$5.1 billion (about £3.9 billion at the time) to expand its presence in the coffee and hot-beverages sector.
More recently, however, Coca-Cola has been reviewing its portfolio. In August 2025 it was reported that Coca-Cola retained advisers (Lazard) and was exploring potential sale options for Costa Coffee.
This sets the stage for the current custody of the brand and potential change in ownership.
5 Key Facts on the Costa Coffee takeover involving KKR
1. KKR has re-entered the bidding process
Investment firm KKR & Co has surprised the market by reviving interest in acquiring Costa Coffee. After having pulled back in August, KKR is now among a “small number of parties” in talks with Coca-Cola and its adviser Lazard.
2. Competing bidders and structure of deal
Other potential buyers include private-equity firms such as Bain Capital and TDR Capital.
Coca-Cola is reported to intend to retain Costa’s ready-to-drink (“RTD”) bottled/canned coffee business while possibly selling the retail/chain operations.
3. Possible valuation markedly lower than purchase
The potential sale price being discussed is around £1.5 billion, which would be significantly less than the ~£3.9 billion Coca-Cola paid in 2018.
This suggests that Costa has under-performed relative to initial expectations under Coca-Cola’s ownership.
4. Strategic rationale for KKR
For KKR, acquiring a global coffee-house chain like Costa offers access to:
- A well-known brand with global scale and loyal customer base.
- Opportunities to expand store network, franchise, growth in emerging markets.
- Synergies with growth in coffee consumption trends, especially hot beverages, premiumisation.
5. Risks and uncertainties remain high
- The talks are still preliminary; no binding offer has been announced.
- KKR’s interest remains “fluid”, and they may team up with another party or withdraw.
- The retail/coffee-chain market faces headwinds: inflation, labour cost pressures, real-estate/logistics challenges.
- A lower valuation may suggest inherent trouble with the business that needs fixing.
What this means for key stakeholders
For Coca-Cola
If Coca-Cola proceeds with a sale of Costa Coffee’s chain business, it could free up capital and allow it to focus on core beverage operations and ready-to-drink growth. The lower sale price may mean a write-down but could still make strategic sense given under-performance.
For KKR & Investors
The acquisition (if closed) would provide KKR exposure to a “premium lifestyle” consumer brand with global potential. Investors will watch for how KKR plans to turn around the business: store growth, digitalisation, franchising, cost control.
For the Coffee Market & Consumers
A private-equity takeover could lead to changes in store formats, pricing, menu strategy, perhaps quicker expansion into new geographies. Consumers may see more aggressive growth of Costa outlets, revamped offerings, or potentially cost discipline (which might impact product experience).
For India & Emerging Markets
Costa already has a presence in India through franchisee operations (e.g., Devyani International). The Economic Times A change in ownership may accelerate expansion in markets like India, bringing more stores, new formats, localised offerings.
What to watch next in the Costa Coffee takeover
- Will KKR submit a binding offer, and what will the valuation be?
- How terms of deal will split the RTD business vs retail chain business.
- The reaction of other bidders (Bain, TDR) and whether a competitive auction emerges.
- Regulatory / antitrust implications in key geographies (UK, EU).
- Post-deal strategy: store rollout, margin improvement plans, global expansion roadmap.
- Impact on Coca-Cola’s financials: any write-down, monetisation of the asset.
Conclusion
The developments in the Costa Coffee takeover underline how established consumer brands with global scale remain coveted in private-equity circles, even amid headwinds. KKR’s revived interest adds momentum to the sale process and signals a perhaps undervalued opportunity in the coffee sector. For Coca-Cola, it could be a timely exit; for KKR, a platform for growth. However, the path ahead remains uncertain and filled with operational challenges.
As this deal unfolds, stakeholders — from investors to franchisees to consumers — will benefit from watching how valuation, strategy and execution fall into place.
