Coca-Cola Couldn't Sell Costa Coffee at Half Price. Now It's Bringing In the Turnaround Firms
Coca-Cola paid $4.9bn for Costa Coffee in 2019, then tried to offload it for about $2bn and found no buyer. Now it has hired restructuring specialists and new leaders to fix the coffee chain it cannot sell.
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?"
Strategic Insights
📊 Analytics & Strategic Insight
The real cost of an acquisition is the price of getting out
The decision most in this industry are avoiding:
👉 Book value is a story until someone pays it. Coca-Cola still carries Costa near its 2019 price. The market has repriced it by more than half. Most boards delay the write-down because taking it admits the first deal was a miss.
👉 Model the exit before the entry. Buyers spend months on the purchase case and almost no time on how they would sell. Costa shows the danger: a business you cannot run well and cannot sell traps cash for years.
👉 A turnaround is the move you make when there is no buyer. Calling in AlixPartners and Alvarez & Marsal is a tell. It is what you do when selling would lock in too big a loss, so you fix and wait.
Here's the full context:
→ 2019: Coca-Cola buys Costa Coffee for £3.9bn, about $4.9bn, to cut its reliance on sugary soft drinks.
→ 2023: CEO James Quincey admits the investment is "not where we wanted it to be"; UK sales sit below pre-deal levels.
→ 2025: Coca-Cola explores a sale near $2bn, roughly 60% below what it paid; KKR, Bain Capital and TDR Capital take a look.
→ January 2026: Coca-Cola pulls the sale after bids come in low and a last-minute push fails.
→ Most recent: In June Coca-Cola hires AlixPartners and Alvarez & Marsal; in early July it installs new senior leaders and names 21-year Coca-Cola finance veteran Matthew Sisk as Costa CFO from September.
What this means for food and beverage operators and investors:
✅ Adjacencies punish owners who cannot operate them. Making drinks and running shops are different businesses. Buyers who assume distribution scale will carry a service business often find out the hard way.
✅ Put illiquid assets in your risk model. A business you cannot sell at a fair price behaves like a fixed cost. You own it whether you want to or not, so price that risk when you buy.
✅ Watch the reset team, not the press release. When a company hires restructuring advisers and installs operators from Starbucks or McDonald's, it is telling you the asset needs surgery. That signal beats any upbeat quote.
3 moves you can make this week:
1️⃣ Put an exit price on every big asset. For each major brand or business you own, write down what a buyer would really pay today. If it sits far below book value, that is a problem to manage now.
2️⃣ Separate your make skills from your operate skills. List where your edge is scale and manufacturing, and where it is running sites, staff and service. Do not buy into the second column unless you can staff it.
3️⃣ Pressure-test your last deal's exit. Take your biggest recent acquisition and ask how you would sell it in two years. If you have no clean answer, build one before you need it.
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Reviewed by Zenith Consulting’s senior food & beverage strategy team.
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