Coca-Cola buys Costa Coffee chain for £3.9billion

Coca-Cola today swooped on Britain’s biggest coffee shop chain Costa in a £3.9 billion takeover of one of the high street’s best-known brands.

The sale of the 40-year-old company caught the City by surprise and sent shares in its current owner, leisure group Whitbread, soaring by almost 20 per cent.

It paves the way for a global “latte war” as the soft drinks giant — best known for its Coke brand— sets up Costa as a platform to challenge world No1 Starbucks.

Whitbread chief executive Alison Brittain told the Standard: “They don’t have coffee in their product range, so now you’ll be seeing Costa all over the world, wherever you see Coke. I’m proud I’ll have played a part in that.”

The company, which started with a single coffee shop in London’s Vauxhall Bridge Road in 1978 by brothers Sergio and Bruno Costa, has grown into Britain’s dominant coffee chain.

Its red and white logo is now found on 2,400 shops and a further 1,400 stores in 30 countries. It also operates more than 8,000 Costa Express self-serve machines in eight countries.

As the world’s second biggest coffee shop group it has a particularly strong presence in China but still ranks far behind Starbucks, which has 24,000 outlets around the world.

One area that Coca-Cola is expected to focus on is “ready to drink, cold brew coffees” one of the fastest growing sector of the global market.

The deal was signed at 6.52am — just seven minutes before it was announced to the London stock exchange — after days of frantic talks.

Whitbread bought Costa from the founders in 1995 when it had only 39 shops for just £19 million. The sale leaves 276-year-old Whitbread, which started as a London brewer, to focus on its value hotel brand Premier Inn.