Whitbread offloads Costa to Coca-Cola
Despite a huge bit of FTSE-relevant M&A action, the European markets tumbled on Friday as Trump upped the ante of his global trade war.
With the President publically threatening to pull the US out of the World Trade Organization if it doesn’t ‘shape up’, the market’s Thursday losses carried over to the final day of August. The DAX shed another 100 points, plunging back under 12400 for the first time in a week, while the CAC lost 0.6% to slip below 5450.
In comparison the FTSE looked alright, dipping just 0.2%. And though that still leaves the index the wrong side of 7500, it is lucky its losses weren’t larger. The FTSE owes its thanks to Whitbread (LON:WTB), which announced that instead of spinning off Costa Coffee as its own company – as it insisted it was doing despite rumours that a sale was in the works earlier in the year –Coca-Cola (NYSE:KO) was buying the chain for a cool £3.9 million.
It’s an incredibly savvy move from the drinks giant, one that not only gives Coca-Cola the hot beverages mega-brand that it lacks, but furthers its diversification push away from sugary carbonated drinks.
As for Whitbread itself, investors were understandably giddy following the news, sending the FTSE 100 firm 17% higher after the bell. It remains to be seen how long investors will be happy with the deal, however, given that it now leaves Whitbread with the less eye-catching, and less potential-filled, Premier Inn as its headliner.
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