Coca-Cola Makes Largest Acquisition Ever; Ford Cancels New Vehicle Imports Due To Tariffs; Dunkin Donuts Is About To Look A Lot Different
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THE BEST PART OF WAKING UP
50 Cent has been dethroned. Coca-Cola closed its largest acquisition to date, with the $5.1B purchase of UK-based coffee chain, Costa. The price tag is the largest acquisition ever by Coke, besting the $2.2B VitaminWater buyout in 2007.
Costa boasts roughly 4k locations mostly in EMEA countries. Aside from their brick and mortars, the brand is known for their express outlets and convenience store coffee. The owner of Costa, UK hotel operator, Whitbread had been under pressure for some time to divest the brand … because you know, their expertise is in selling rooms to weary travelers.
The global coffee wars have been brewing for some time now. Costa has been encroaching on Starbuck’s dominance in China, buying out Yueda’s stake in a 250 store joint-venture late last year. Other players in the space like JAB and Nestle have been jockeying for position as well. Nestle recently acquired the right to distribute Starbucks ready-to-drink products for $7B.
Water Cooler Talking Point: “This seems like a natural fit for a company who once used cocaine in their product.”
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RETURN TO SENDER
Ford has announced that it is canceling plans to import a Chinese-manufactured Focus due to tariff costs on the vehicle.
By the second half of 2019, Ford planned to release a new version of its Focus model, the Focus Active, a crossover that would be manufactured in China. But the 25% tariffs levied on over $50B in Chinese products handed down in July threw a wrench in Ford’s plans.
While the company won’t be selling the Focus Active in the US, where it plans to kill off the model to make room for the new Ranger and Bronco models, the compact SUV will still be available overseas. No word yet on if they will be releasing a limited edition OJ Simpson model.
Water Cooler Talking Point: “Looks like I’ll need to find a new model to be the butt of all of my relatively inexpensive, mass-produced car jokes.”
AMERICA RUNS ON DUNKIN
Dunkin is investing $100MM in its franchise owners to help stores better handle customers that are increasingly on the go.
The new Dunkin locations, which are dropping “Donuts” from their moniker, will have dedicated pickup areas and different drive-thru lanes to make it easier for customers who have ordered ahead on their mobile app.
The new store design aims to improve accuracy, order speed, and convenience. Although no DD’s, er D’s, are company-owned, franchisees are doing their part, having invested more than $1B over the past three years to remodel existing locations.
And the plan doesn’t mean that Dunkin doesn’t plan to expand its coffee-first empire. The preferred donut shop of Casey Affleck hopes to add 1k new stores by the end of 2020, resulting in more than 10k total locations.
Water Cooler Talking Point: “Maybe this means their app will work more than 75% of the time.”
IN OTHER NEWS
- Deal or no deal. The US and Canada were unable to reach an agreement on NAFTA. After the US and Mexico agreed to terms on Monday, a Friday deadline was set for Justin Trudeau and team. But it appears to be a bit of a moving target as talks will resume Wednesday between the world-power … and Canada.
- Argentina got a bailout of sorts from the IMF on Friday. While no money changed hands, the IMF publicly pledging its “full support” to Argentina stabilized the countries currency, the peso.
- Advertising giant WPP named Mark Read as its next CEO, taking over for the departing founder, Martin Sorrell. Now they just need to find a way to get rid of Facebook and Google …
- Chinese e-commerce giant JD.com announced that its CEO, billionaire Liu Qiangdong has returned to China after being arrested for “criminal sexual conduct” at the University of Minnesota where he is pursuing his doctorate.
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