Whitbread plc has announced that it has entered into an agreement for the sale of Costa Limited (Costa), to The Coca-Cola Company (Coca-Cola), for an enterprise value of £3.9 billion.

Whitbread acquired Costa in 1995 for £19 million when it had only 39 shops.

In more recent years, Whitbread report to have been focused on building Costa into an international coffee brand which has now resulted in the opportunity to combine the Costa brand with Coca-Cola.

Whitbread report the combination will ensure new product development, continued growth in the UK and more rapid expansion overseas.

Alison Brittain, Whitbread chief executive, commented: “I am delighted that we have agreed the sale of Costa to Coca-Cola for £3.9 billion.

“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.”

Whitbread has also announced it will reduce debt and make a contribution to its pension fund, which will provide additional headroom for the expansion of the UK’s hotel business, Premier Inn.

James Quincey, Coca-Cola president and CEO, commented: “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.

“I’d like to welcome the team to Coca-Cola and look forward to working with them.”