Coca-Cola Faces Potential Setback in Major Coffee Chain Divestment

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Shareholders of Coca-Cola are receiving a quarterly dividend payment of $0.51 per share today. However, this routine distribution is occurring against a backdrop of corporate uncertainty, as a multi-billion dollar divestment negotiation teeters on the brink of collapse. The beverage giant's planned sale of its Costa Coffee chain to private equity firm TDR Capital is in serious jeopardy.

Even as the Costa Coffee sale hangs in the balance, Coca-Cola has solidified its long-term leadership plan. The company announced that Henrique Braun, currently an Executive Vice President, will assume the role of Chief Executive Officer on March 31, 2026. Incumbent CEO James Quincey will transition to the position of Executive Chairman at that time. This internal succession is viewed by market observers as a move designed to ensure strategic continuity during a period of potential portfolio change.

A Multi-Billion Pound Valuation Gulf

The core obstacle to the Costa Coffee transaction is a significant valuation gap. Reports indicate that approximately £2 billion (equivalent to $2.6 billion) separates the price expectations of Coca-Cola and TDR Capital. This disparity is substantial, representing more than half of the $5.1 billion purchase price Coca-Cola paid to acquire the coffee chain back in 2018.

Current negotiations, which are expected to conclude this week, involve a proposed structure where Coca-Cola would retain a minority stake in Costa Coffee should a deal be finalized. If the talks fail entirely, the coffee business will remain under Coca-Cola's corporate umbrella, necessitating a revised operational and strategic approach for the segment.

Financial Performance and Shareholder Returns

Coca-Cola's underlying business continues to show strength. The company reported third-quarter 2025 revenue of $12.5 billion, marking a 5% year-over-year increase. This performance was driven by a 6% rise in organic growth, primarily fueled by strategic pricing actions. For the full fiscal year, management is targeting organic revenue growth in a range of 5% to 6%, with earnings per share anticipated to grow by approximately 3%.

The dividend paid today brings the annual payout to $2.04 per share, yielding close to 3%. Institutional investor activity has been mixed recently. Thompson Davis & CO. established a new position, purchasing nearly 17,500 shares valued at $1.24 million. Conversely, Kentucky Retirement Systems reduced its holding by 6.2% during the second quarter.

A resolution regarding the fate of Costa Coffee is imminent. Should the sale to TDR Capital ultimately fall through, Coca-Cola will be forced to either recalibrate its standalone strategy for the coffee unit or seek an alternative buyer in the market.