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Coca-Cola in talks to pick stake in Cafe Coffee Day after pocketing Costa

Coca-Cola Atlanta office is leading the talks to acquire a substantial stake in the coffee chain

Coca-Cola  | Coca-Cola India | cafe coffee day

Viveat Susan Pinto  |  Mumbai 

Coca-Cola in talks to pick stake in Cafe Coffee Day after pocketing Costa

The world's largest beverage company, Coca-Cola, has begun preliminary talks for a substantial stake buy in 10 months after it acquired UK-based Costa Coffee for $5.1 billion. The discussion with the Bengaluru-based company, promoted by VG Siddhartha, who exited information technology firm Mindtree earlier this year, is being led by the Atlanta office of the beverage major, persons in the know said.

T Krishnakumar, president and chief executive officer, India and South West Asia, is currently in Atlanta and is involved in the negotiation, it is learnt. A India spokesperson said the about a possible acquisition was speculative in nature and that the company had no comment to offer at this stage. too declined to comment.

has been looking to make inroads into the Rs 2,500-crore domestic coffee retail market in line with its global strategy of diversifying into non-carbonated drinks. While the Costa Coffee acquisition last year was intended to help the company do just that, an impediment has been the franchise agreement that Costa’s previous owner Whitbread had with billionaire-bottler Ravi Jaipuria in India.

Coca-Cola in talks to pick stake in Cafe Coffee Day after pocketing Costa

Jaipuria’s Devyani International continues to run around 50 stores of Costa Coffee in the country, unable to work out a deal with Coca-Cola for his exit out of the franchise agreement. Jaipuria was not immediately available for comments on the matter.

For Cafe Coffee Day, an acquisition by Coca-Cola will mean much-needed funds to reduce the debt on the books of parent Coffee Day Enterprises. is owned by Coffee Day Global, a subsidiary of Coffee Day Enterprises.

As on March 31, 2019, Coffee Day Enterprises' total debt stood at Rs 6,547 crore, two-and-a-half times its networth of Rs 2,529 crore. Its market capitalisation after Wednesday’s closing price stood at Rs 4,732 crore.

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First Published: Thu, June 27 2019. 02:33 IST