Coca-Cola to buy Costa Coffee for €4.4bn
British coffee chain Costa has been bought by Coca-Cola for almost €4.4bn.
The sugary drinks giant announced the move as part of its plan to move into the hot drinks market.
The coffee shop to hotels group said earlier this year that it would split Costa and list it as a separate entity, following pressure from activist investor Elliott.
Costa operates mainly in the UK and it also has a number of Irish outlets.
On agreeing to the sale, Whitbread said it was "in the best interests of shareholders".
Proceeds of the deal will be used to pay down debt and boost the pension fund.
Whitbread added that it intends to return a significant majority of net cash proceeds to shareholders.
The company said the sale of the coffee chain will allow it to focus on its Premier Inn hotels business.
Chief executive Alison Brittain said: “This transaction is great news for shareholders as it recognises the strategic value we have developed in the Costa brand and its international growth potential, and accelerates the realisation of value for shareholders in cash.
“This combination will ensure new product development, continued growth in the UK and more rapid expansion overseas.”
Coca-Cola boss James Quincey said: “Costa gives Coca-Cola 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.”
