Aug 24 (Reuters) - U.S. soft drinks company Coca-Cola

is working with investment bank Lazard ( LAZ ) to review options,

including a potential sale, of British coffee chain Costa, a

source familiar with the matter told Reuters on Sunday.

Coca-Cola did not immediately respond to a request for a

comment outside regular business hours. Costa, and Lazard ( LAZ ) did

not immediately respond to requests for comment.

The company has held initial talks with a small number of

potential bidders for Costa, including private equity firms, Sky

News first reported, citing unidentified sources.

Indicative offers are expected in early autumn, but a sale

is not definitive, Sky reported.

Coca Cola acquired Costa Coffee in 2018 for over $5 billion,

to strengthen its position in the global coffee market,

competing with Starbucks ( SBUX ) and Nestle .

A potential sale of Costa Coffee which operates in 50

countries, would add onto the wave of dealmaking in the packaged

food space which has witnessed robust growth as companies seek

scale to weather the impact of price inflation and consumers

shopping for healthier options.

In an earnings call last month, the Coca-Cola CEO James

Quincey hinted at changes to Costa's operations, saying "Our

investment in Costa is not where we wanted it to be from an

investment hypothesis point of view."

"We're in the mode of reflecting on what we've learnt,

thinking about how we might want to find new avenues to grow in

the coffee category, while continuing to run the Costa business

successfully."

In the United States, food companies are seeking healthier

substitutes as they respond to Health Secretary Robert F.

Kennedy Jr.'s Make America Healthy Again campaign. In July

Coca-Cola had agreed to use real cane sugar in the United

States.