Coca-Cola to buy Costa in a major £3.9bn deal with Whitbread

Revealed today (August 31), Costa is to be bought by the Coca-Cola company from its owner, Whitbread, in a deal worth £3.9bn.

Whitbread believes a straight sale is more profitable than spinning off the coffee company.

Chief executive, Alison Brittain said Whitbread would now focus on its Premier Inn business in the UK and Germany.

Whitbread bought Costa - now the UK’s biggest coffee chain - for £19m in 1995.

At the time, it had just 39 outlets. It now has more than 2,400 UK coffee shops, as well as some 1,400 outlets in 31 overseas markets. Costa Express has 8,237 vending machines worldwide.

Speaking on BBC’s Today programme, Ms Brittain explained the reasoning behind Coca-Cola wanting to buy Costa was because “they want the coffee product, they have no coffee in their range”.

She said the money from the sale would be used to expand the Premier Inn chain, return some cash to shareholders, pay down debt and boost the pension fund.

Coca-Cola’s chief executive, James Quincey has told investors that Costa is “a winning company that can go global”.

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