Whitbread is going to spin off Costa Coffee as a separate firm following pressure from activist investors.
“We will ensure prior to separation each business is sufficiently developed and well-positioned,” said Whitbread chairman Adam Crozier.
The demerger will be “pursued as fast as practical and appropriate” to optimise value for shareholders.
Whitbread chief executive Alison Brittain said: “We are confident that both Premier Inn and Costa will soon be businesses of sufficient strength, scale and capability to enable them to thrive as independent companies.
“The board, therefore, believes that it is in the best long-term interests of Whitbread’s many stakeholders to separate Premier Inn and Costa, via a demerger of Costa.
“The management team and I are excited that the strategy we are executing will give us the opportunity to create two high-quality independent businesses that will create long-term value for our stakeholders.”