Premier Inn owner Whitbread buys three hotels in German expansion

(Reuters) - Britain's Whitbread Plc <WTB.L> said on Monday it bought three independent hotels in Germany for an undisclosed sum, as the company expands in Europe as part of its focus on the hotel business following the sale of its Costa Coffee chain.

The sale of the coffee chain to Coca-Cola Co <KO.N>has left the Premier Inn owner more exposed to increased competition from budget hotel groups and Airbnb when subdued economic activity and political turmoil have forced Britons to rein in spending.

Whitbread has looked to counter the weakness in its home market by expanding abroad.

The three hotels, located in Nuremburg, Munich and Stuttgart, together comprise 482 rooms, the company, which already runs three hotels in Germany under the Premier Inn brand, said on Monday.

They will remain under the current "Acomhotel" brand until refurbishment work is completed and then relaunched as Premier Inn hotels, which is expected to be in early 2020.

A further 40 hotels are now in the pipeline across 16 key cities in Germany, Whitbread said.

The return on capital from the acquisition is expected to be above its weighted-average cost of capital, the company said.

(Reporting by Tanishaa Nadkar in Bengaluru; Editing by Sriraj Kalluvila)