Coca-Cola takes big step into coffee with $5.1 billion Costa deal

Coca-Cola Co has agreed to buy the world's second largest coffee chain Costa from Britain's Whitbread Plc for $5.1 billion including debt, opening a new front in its push into healthier markets.

The two companies said on Friday that Coke, one of the biggest soft drinks groups in the world, would buy Costa's almost 4,000 outlets across markets such as Britain, Europe and China after Whitbread's board unanimously backed the deal.

Whitbread shares jumped 19 per cent in early trading, with dealers saying the purchase price was more than 700 million pounds ($911 million) higher than expected.

The purchase of the biggest coffee chain behind Starbucks adds to Coca-Cola's drive to diversify away from fizzy drinks and expand its options for increasingly health-conscious consumers after countries started introducing sugar taxes.