Coca-Cola is to buy the Costa coffee chain for £3.9bn, after owner Whitbread demerged it earlier this year.

Whitbread said its board had unanimously approved the deal as being in the best interests of shareholders.

Whitbread chief executive Alison Brittain said the deal would combine the Costa brand with Coca-Cola’s global scale, product and distribution capabilities.

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.

Ms 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.

“The announcement today represents a substantial premium to the value that would have been created through the demerger of the business and we expect to return a significant majority of net proceeds to shareholders.

“Whitbread will also reduce debt and make a contribution to its pension fund, which will provide additional headroom for the expansion of Premier Inn.”