Coca-Cola will not only face stiff competition from Starbucks, but also Swiss drink company Nestle, completed a a $7 billion licensing deal for Starbucks’ retail business. Coca-Cola’s purchase of Costa highlights the beverage company’s shift from carbonated drinks and focus more on health-conscious consumers.

Shares of Costa’s parent company Whitbread were up as much as 19% following the buyout news.

“Coca-Cola are one of the few companies in the world that could justify the valuation,” said Nicholas Hyett, equity analyst at Hargreaves Lansdown. “Its global reach should turbo-charge growth in the years to come, and hot drinks are one of the few areas of the wider beverages sector where the soft drinks giant doesnt have a killer brand. Costa will get lots of care and attention.”

For more market trends, visit

Subscribe to our free daily newsletters!
Please enter your email address to subscribe to ETF Trends' newsletters featuring latest news and educational events.