Multinational carbonated soft-drink company Coca-Cola has purchased Costa Coffee from Whitbread in a deal worth £3.9bn earlier today.
Whitbread is listed on the FTSE100, London Stock Exchange which saw shares rise 17% this morning as soon as the deal was announced.
Founded in 1742 by Samuel Whitbread, Whitbread is now a multinational hotel chain known for their ‘Premier Inn’ brand, which operates 750 hotels, 65,000 rooms across the UK.
Costa Coffee was founded in 1971 and acquired by Whitbread PLC in 1995 for a sum of £19m.
The coffee shop grew massively over the years with 2,861 stores in 30 different countries.
Alison Brittain, Chief Executive from Whitbread, 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.”
By the end of 2010, Costa Coffee overtook Starbucks in market share-owning 37.6%; Costa currently has 2,300 restaurants in the UK and further 6,000 Costa Express vending machines.
Mrs Brittain also added the sell-off to Coca-Cola would allow them to focus more on Premier Inn. The company was already looking to demerge Costa before the offer came through.
James Quincey, Chief Executive of Coca-Cola, 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.”
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