Coca-Cola Couldn't Sell Costa Coffee at Half Price. Now It's Bringing In the Turnaround Firms

In 2019, Coca-Cola paid £3.9bn, about $4.9bn, for Costa Coffee. Last year it tried to sell the chain for around $2bn. Even at roughly 60% off, no buyer would close the deal.

So Coca-Cola stopped trying to sell. Now it is trying to fix. In June it brought in two restructuring firms to comb through Costa. In early July it named new leaders to run the job. This is what happens when a big strategic bet goes wrong and there is no clean way out.

The deal that looked smart in 2019

Coca-Cola bought Costa to move beyond fizzy drinks. Sugar was under pressure from taxes and health rules. Hot coffee looked like the future, and Costa came with thousands of coffee shops and self-serve machines across the UK and beyond. The plan was simple. Put Costa inside Coca-Cola's giant distribution system and grow it worldwide.

The growth never arrived the way they hoped. Then-CEO James Quincey later said the investment was "not where we wanted it to be." UK sales slipped below where they sat before the deal, and the UK arm fell into a pre-tax loss. Running coffee shops takes skills a drinks maker does not have. You pay rent, wages and power on every cup, and scale in syrup does not carry over to service.

Why no one would buy it

Coca-Cola put Costa up for sale and hired bankers to find a buyer. Big private equity names looked, including KKR, Bain Capital and TDR Capital. A late push to get a deal done fell apart. In January 2026 Coca-Cola pulled the sale.

Here is the hard part. An asset is only worth what someone will actually pay. Coca-Cola still valued Costa near its 2019 cost on the books. The market said closer to $2bn, and even then buyers walked away. When your own carrying value is more than double the best offer, selling means booking a huge loss in public. For any board, that is a painful thing to sign.

From "for sale" to "fix it"

With no buyer, Coca-Cola changed course. In June it hired AlixPartners to review how Costa runs and Alvarez & Marsal to review its finances. These are the firms companies bring in when a business needs real surgery. Then came fresh leadership. In early July Coca-Cola moved one of its own executives into a top Costa role and brought in a former Starbucks and McDonald's operator for another. Days later it named Matthew Sisk, a 21-year Coca-Cola finance veteran, as Costa's new chief financial officer from September.

The message is clear. Coca-Cola will run Costa harder, cut what does not work, and try to lift its value before it tests the market again.

The bigger pattern in beverages

Costa is not a one-off. Across drinks, the giants are backing away from bets that once looked clever. Keurig Dr Pepper is splitting off its coffee arm with JDE Peet's. Nestlé has been trimming its coffee-shop holdings. Diageo has walked back its premium push. The shape is the same each time. Buy a shiny business next door, struggle to run it, then spend years untangling it.

Coffee is a hard trade. Margins are thin and costs are fixed. A drinks giant that prints money on concentrate does not automatically know how to run thousands of shops. That gap between owning and operating is where a lot of value leaks away.

What it means next

For operators and investors, Costa is a live lesson in exit risk. The point is not that coffee is a bad business. It is that the price you pay only pays off if you can either run the asset well or sell it later. Coca-Cola can afford to wait, fund a turnaround and try again in a year or two. Most companies cannot. The next time a strategic buyer offers a rich price for a business next door, the sharp question is not "what will it cost to buy?" It is "what will it cost to leave?"