Coca-Cola is considering the sale of Costa Coffee, Britain’s largest high street coffee chain, in a move that could value the business at around £2bn, according to Sky News.

The Atlanta-based drinks group has engaged Lazard to sound out interest from prospective buyers, including private equity firms. Indicative offers are expected in the early autumn, although Coca-Cola may ultimately decide not to proceed with a sale.

Coca-Cola acquired Costa from Whitbread in 2018 for £3.9bn as part of its strategy to diversify beyond soft drinks. However, analysts note that a sale today would crystallise a multibillion-pound loss.

Costa operates more than 2,000 outlets in the UK and over 3,000 globally, supported by its Costa Express vending machine network. The brand employs an estimated 35,000 people worldwide. Despite recording £1.22bn in revenues in 2023, performance has lagged behind the £1.3bn reported in 2018.

Coca-Cola CEO James Quincey previously described Costa as providing the group with “new capabilities and expertise in coffee,” but recent inflationary pressures and restructuring initiatives have weighed on performance. Still, Costa has distributed more than £250m in dividends to Coca-Cola since the takeover.

The potential sale comes amid intensifying competition in the coffee sector, with rivals including Starbucks, Caffè Nero, Pret A Manger, and bakery chain Gail’s.

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