Gail’s owner makes bid for Costa Coffee

Private equity powerhouse Bain has made a bid for Costa Coffee, the Financial Times has reported.

Joining Asda owner TDR Capital, Bain Capital’s Special Situations unit is one of a small number of PE firms to have submitted a first-round bid to owner Coca-Cola for the coffee chain, reportedly marketed at a price of around £2bn.

US-based PE firm KKR is also understood to have held initial talks with Lazard, the investment bankers advising Coca-Cola on the sale.

The process has attracted fewer bidders than Coca-Cola had expected, according to reports in both the Financial Times and Sky News, and in late September Wagamama owner Apollo Global Management disappointed speculation by declining to put in an offer.

Bidders will be vying for the nearly 2,800 Costa shops in the UK and Ireland, with Coca-Cola understood to be retaining the brand’s RTD coffee range.

The world’s second-largest coffee chain after Starbucks, Costa has struggled to handle its midmarket position, as it is squeezed by rising costs and competition from upmarket rivals such as Gail’s and independent cafés.

Coca-Cola acquired Costa in 2018 in a move designed to reduce Coca-Cola’s reliance on sugary drinks.

CEO James Quincey promised the soft drinks giant would become a ‘total beverage company’, building “new capabilities and expertise in coffee”, including café culture and foodservice.

Yet in July 2025, Quincey admitted to investors Costa had “not quite delivered” and was “not where we wanted it to be from an investment hypothesis point of view”.

Coca-Cola is not the only drinks business to consider cutting coffee, with Keurig Dr Pepper planning to divide itself into two pureplay coffee and fizzy drinks businesses after it completes the acquisition of Dutch coffee giant JDE Peet’s.