What Whitbread’s planned sale of Costa Coffee to Coca-Cola means

U.K. leisure group Whitbread is set to sell Costa Coffee chain to U.S. soft-drinks maker Coca-Cola for roughly £4bn (or $5.2 billion).

With 4,000 stores in 32 countries, Costa is the second-largest coffee shop in the world after Starbucks.The deal allows Coca-Cola Inc. KO, +0.85% to diversify away from fizzy and sugary drinks and expand into healthier offerings. Costa is aiming to triple its store presence in China.

Credit-rating firm Fitch forecasts that coffee consumption will rise by 2.1% year-on-year in volume terms in 2018, reaching 156 million tonnes globally. The sector has been in a mergers-and-acquisitions frenzy in recent years as fast-moving, consumer-goods companies rush to gain exposure to the high-margin sector.

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