What's going on?

On Friday, Coca-Cola announced it�s buying Costa Coffee � a British coffee chain not dissimilar to Starbucks � from its parent company, hotel, pub and restaurant owner Whitbread for $5 billion.

What does this mean?

Costa�s got a footprint to rival the global coffee brands � it�s got more stores in Europe than Starbucks! (Tweet this.) This purchase will allow Coca-Cola to make a big, caffeinated splash in the coffee market, following in the footsteps of JAB�s purchase of coffee and sandwich chain Pret A Manger in May.

Falling consumption of sugary drinks is hitting Coke�s hallmark products, as consumers look to healthier alternatives (last year, soda consumption fell to a 32-year low, according to Beverage Digest). The company�s growing in other, non-fizzy areas like coffee � selling java in Japan, Australia and Vietnam since last year.

Why should I care?

For markets: Coffee bringing the Benjamins.

Shares of Costa�s owner, Whitbread, bubbled up by 15%. Last year, Costa contributed 26% to Whitbread�s overall profit � and now it�s being bought for $5 billion, which is more than half the total value of Whitbread (about $8.5 billion before the announcement). This was probably a pleasant surprise for investors, who bought the stock. The deal pits Coke against Nestl� � which owns Blue Bottle Coffee and signed a $7 billion deal to distribute Starbucks� coffees in grocery stores.

The bigger picture: A win for activist investors.

The deal�s a win for the activist investors who’d bought a stake in Whitbread, pushing it to split up its coffee and hotels businesses. Though the breakup didn�t happen exactly as planned, they�ve mostly had their way and likely made a profit. But it doesn�t always work out that way for activists: billionaire activist investor Carl Icahn hoped to stop the $54 billion takeover of Express Scripts by Cigna, but was outvoted by other shareholders who supported the deal.