Here's Why Coca Cola Is Looking to Buy Costa Coffee

Coca Cola has agreed buy Costa Coffee for $5.1 billion from U.K. based Whitbread.
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Coca Cola (KO) - Get Report has agreed buy Costa Coffee for $5.1 billion from U.K. based Whitbread PLC (WTBDY) .

"I actually think this is potentially a decent fit for Coca Cola," said Michael Hewson, chief market strategist at CMC Markets, based in London. "There's an awful lot of what I would call government intervention when it comes to sugary drinks and there's an awful lot of diversification of these big drink retailers."

Hewson pointed to Pepsico's (PEP) - Get Report recent acquisition of SodaStream as a recent example of diversification in the consumer goods space.

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