5 Things to Know Before the Opening Bell 8/25/2025

0:02I'm Andrew Osorkin, co-host of Squawk Box. Today I'm with Leslie Picker and Wilfred Frost. And this is five things to know before the opening bell. Spotify looking at increasing prices for its users. The company's co-president telling the Financial Times price hikes were part of our toolbox now. He said the changes would also come with new features. Meantime, shares of Danish wind power company Orsted are plunging the Trump administration, ordering the developer to stop construction on an almost completed project off the coast of Rhode Island, though the company said it would continue with a plan to raise capital.

0:34And China Evergrande Group delisted from the stock exchange in Hong Kong today. The company was once China's top selling developer, but ran into financial problems you might remember years ago and then defaulted on some debt obligations. Keurig Dr. Pepper will pay more than 18 billion dollars in cash to buy Dutch coffee company J.D.E. Peets Keurig. Peets rather, Keurig saying the merged company plan to separate, though, its coffee and other beverage units as soon as practicable. And reports say that Coca-Cola, working with investment bankers on options, including a potential sale of British coffee chain Costa, Coke acquired Costa in 2018 for more than$5 billion to try to strengthen its coffee market offering.

1:16Sky News saying initial talks have already been held with several private equity firms. And by the way, that's a topic you know a lot about. I like Costa coffee and those Costa machines, which are in airports. But they never really have taken off the way I think they were hoping for. No, so shout out to my colleague, Mark Kleinman, who broke that story late on Friday and also reported that it's Lazard that's been hired, according to his reporting, by Coca-Cola to explore this sale. It's funny you mentioned those machines, because I remember talking about this at length with James Quincy and with Sarah when it all broke initially, that why would they want to buy the biggest physical coffee chain in the UK, which, by the way, was poor timing pre-pandemic and the longer lockdowns, obviously, that the UK had.

2:00And the reason was those machines. Yeah, basically all across the country in the UK in service stations, including the really small ones where you just have a very small gas station, not the kind of rest of the restaurants. And it was the best kind of coffee with a good brand behind it, easy for the small service station to operate. And it reduced costas numbers hugely. But they never really got rolled out here. So I think that was a big part of why they tried to buy them and why they saw upside in it. But that part of it never played out. Now, the core part of it, the core business, they still have 2 ,000 stores in the UK, 3 ,000 globally.

2:34It's not classic business model for Coca-Cola. So you can see why after some years they want to exit it. 35 ,000 employees. And in the UK as well, there's been quite a lot of added taxes on that. So it's just you can see why it doesn't fit. But the reporting by Mark Kleinman suggests that the sale value could be as little as£2 billion. And they paid about£4 billion. pounds. They've taken some stuff out of it during the time, some dividends and things. But yeah, it's a drop in the ocean for Coke, so it doesn't really matter. But it hasn't proven to be particularly successful. I mean, cutting in half valuation, nobody wants to see that.

3:10I like the brand as well. I agree with you. It's more of the sort of mass market coffee chain in the UK. I kind of compare it here to like Dunkin' in terms of the fuel. It's my favorite. I like a simple coffee, none of this over the top stuff. Well, I think it's also the latest indication. And, you know, when you talk to bankers about kind of strategically what companies are doing these days with their portfolio, it's all about kind of focus and slimming down in the face of uncertainty, but also bulking up with like companies. So it's, you know, the conglomerates, which we've seen now with Coca-Cola, as well as with, you know, Keurig as well, this idea of kind of merging together similar assets from the portfolio and then separating those that don't makes sense to kind of the core focus of the company.

3:55So this fits in with that theme as well. Definitely. But I think there were some comments in the last earnings call where he kind of hinted that coffee's not as core to them anymore, but they're still exploring it. So Coke haven't commented on this yet. We're going to be back later today with an all-new Squawk Pod, our daily podcast featuring the best of Squawk Box. Check it out wherever you get your podcasts and listen anytime.

4:23Thank you.