Whitbread, the hotels-to-brewing group, has agreed to sell its Swallow Inns and Restaurants operation to Enterprise Inns for £119 million.

The chain of 183 pubs and restaurants, which was put up for sale in February this year, was formerly part of Swallow Group bought by Whitbread in January.

Since then, the company has announced that 27 Swallow hotels will be rebranded under the Marriott name. Whitbread has spent more than £3.5 million and created nearly 100 jobs in East and West Sussex over the last year. A spokeswoman for Whitbread said: "We made it very clear at the time of our bid for Swallow that we intended to sell the inns and restaurants business this year."

The company recently announced strong profits for last year and said it would still consider the sale of its brewing business as and when a suitable approach was made. The brewing division had originally been put up for sale last year to meet regulatory requirements when it attempted to buy Allied Domecq's pub business but pulled the sale when it lost the takeover battle.

Several major brewers including Dutch-based Heineken have been rumoured to be interested in a possible bid. Whitbread now has more than 300 hotels in its Marriott chain and 43 David Lloyd health clubs.

At the weekend, the firm was reported to be considering selling its brewing assets to Belgium rival Interbrew. Whitbread was formed as a brewing business when Samuel Whitbread founded the firm in 1742. It began brewing Heineken under licence in 1968 and bought Boddingtons in 1989. The last decade has seen the firm move into the leisure industry, buying hotels, coffee shops, restaurants and fitness clubs.

Converted for the new archive on 30 June 2000. Some images and formatting may have been lost in the conversion.