Coca-Cola may buy major stake in Cafe Coffee Day after acquiring Costa Coffee

Soft drinks maker Coca-Cola has initiated preliminary talks with Cafe Coffee Day (CCD) to acquire a substantial stake in India's largest coffee chain. If the deal materialises, it would be Coca Cola's second major investment after acquiring UK-based Costa Coffee for $5.1 billion in September 2018.

The US beverage giant is eyeing a significant foothold in the fast-growing cafe business space as the core carbonated drinks segment is slowly losing sheen, a source told the Economic Times.

Both the companies are exclusively discussing the contours of the deal which is being led by Coca-Cola's head office in Atlanta.

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"The potential stake acquisition is being driven by Coca-Cola's headquarters in Atlanta and officials from the beverage maker's global team are engaged in active talks with the Coffee Day management," the source told the news daily.

"It would give Coca-Cola significant scale in the fast-growing cafe business, compared to aerated soft drinks, which have been slowing down," he added.

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Meanwhile, the beverage maker's spokesperson told the news daily that the news is "absolutely speculative in nature" and refused to comment on the same under the company policy.

Founded by VG Siddhartha, CCD is India's largest coffee chain and is owned by Coffee Day Global which is a subsidiary of Coffee Day Enterprises. The coffee chain as of March 2019 had a footprint of 1,752 cafes in the country and is a market leader in organised cafe space.

Siddhartha is the elder son-in-law of former Karnataka Chief Minister SM Krishna. He is credited with creating India's largest coffee empire.

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All the coffee served at Coffee Day outlets comes from the 10,000 acres of plantations that Siddhartha owns in Chikmagalur, Karnataka.

He opened CCD's first outlet on Bangalore's upscale Brigade Road in 1996. The coffee chain's first launch came at a time when Bangalore was on the cusp of a transformation from a pensioners' paradise to an IT and lifestyle haven.

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