Coca-Cola on Friday swooped on Britain's biggest coffee shop chain Costa in a 3.9 billion pounds (5.06 billion U.S. dollars) takeover of one of the high street's best-known brands.

The sale of the 40-year-old company caught the London financial center, the City, by surprise and sent shares in its current owner, leisure group Whitbread, up by almost 20 percent.

The deal was signed at 6.52 a.m. (BST), just seven minutes before it was announced to the London stock exchange, after days of frantic talks.

It paves the way for a global "latte war" as the soft drinks giant -- best known for its Coke brand -- sets up Costa as a platform to challenge world No. 1 Starbucks.

Whitbread chief executive Alison Brittain said, "They don't have coffee in their product range, so now you'll be seeing Costa all over the world, wherever you see Coke."

Brittain said Whitbread would now focus on its Premier Inn business in the UK and Germany.

Whitbread bought Costa, which is now the UK's biggest coffee chain, for just 19 million pounds (24.63 million U.S. dollars) in 1995.

The company, which started with a single coffee shop in London's Vauxhall Bridge Road in 1978 by brothers Sergio and Bruno Costa, has grown into Britain's dominant coffee chain.

Its red and white logo is now found on 2,400 shops and a further 1,400 stores around the world. It also operates more than 8,000 Costa Express self-serve machines.

As the world's second biggest coffee shop group, it still ranks far behind Starbucks, which has 24,000 outlets around the world.

One area that Coca-Cola is expected to focus on is "ready to drink, cold brew coffees," one of the fastest growing sector of the global market. 

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