Coca-Cola is to buy Costa coffee from leisure group Whitbread in a deal that values the UK high-street chain at £3.9bn including debt.

James Quincey, Coca-Cola president and chief executive said that Costa would give the company, “new capabilities and expertise in coffee and our system can create opportunities to grow the Costa brand worldwide”.

“Hot beverages is one of the few remaining segments of the total beverage landscape where Coca-Cola does not have a global brand. Costa gives us access to this market through a strong coffee platform.”

Whitbread had previously announced it would spin off Costa from the rest of its business, which is focused on the faster-growing Premier Inn hotel brand, after coming under pressure from activist investors.

A “significant majority” of the net cash proceeds of around £3.8bn from the deal will be returned to shareholders, Whitbread said.

AFP