Coca Cola is to buy coffee chain Costa for £3.9bn.

The current owner, Whitbread, announced a plan to spin off Costa earlier this year.

It says the proceeds of the buyout will be used to reduce debt, boost its pension pot, as well as giving it cash to grow its Premier Inn hotel chain in the UK and Germany.

The deal was unanimously agreed by the Whitbread board to be in the best interests of shareholders, the company said in a statement.

Costa has grown from a small company founded in London 47 years ago to the UK's largest coffee chain.

The brand was launched by Italian brothers Sergio and Bruno Costa with a single store in Vauxhall Bridge Road, Victoria, in 1971.

The business was sold to Whitbread for £19m in 1995, when it had only 39 shops.

Costa grew to become the UK's largest chain, with 40% of the UK coffee shop market.

It has more than 1,500 in the UK and a further 900 overseas, including Ireland.

There are more than 300 outlets in 28 cities in China and a branch in Phnom Penh, Cambodia.

Worldwide sales hit £1 billion in 2013, with a target of £2.5 billion in 2020.

Sales at Costa have been affected by Britain's high street woes and fell by 2% in the UK in the first quarter of this year.