Yum Brands Sells Pizza Hut for $2.7 Billion
Yum Brands has announced the sale of its Pizza Hut restaurant chain for a total of $2.7 billion. The transaction involves two separate buyers: private equity firm LongRange Capital will acquire Pizza Hut's U.S. and international businesses, excluding mainland China, for approximately $1.5 billion. Concurrently, Yum China Holdings Inc. will purchase the mainland China operations for about $1.2 billion. The sale follows a strategic review initiated by Yum Brands in November, amid declining comparable store sales and plans to close 250 U.S. restaurants.
Yum Brands, the parent company of Pizza Hut, has finalized the sale of the struggling restaurant chain for a total of $2.7 billion. This decision comes after the company indicated in February its consideration to sell Pizza Hut, a chain that has faced challenges with outdated stores and increasing competition.
LongRange Capital is set to acquire the majority of Pizza Hut's global business, specifically its operations in the U.S. and international markets, for approximately $1.5 billion. Separately, Yum China Holdings Inc. will take ownership of the Pizza Hut business within mainland China for an estimated $1.2 billion.
Pizza Hut, founded in 1958 in Wichita, Kansas, was acquired by PepsiCo in 1977. PepsiCo later spun off its restaurant division in 1997, which subsequently became Yum Brands. Yum Brands also owns other prominent restaurant chains, including KFC and Taco Bell.
Chris Turner, CEO of Yum Brands, stated that the new ownership structure under LongRange Capital and Yum China would position Pizza Hut for future growth, leveraging their deep expertise within the restaurant industry. The sale follows a strategic review that Yum Brands, based in Louisville, Kentucky, initiated in November due to declining sales at comparable Pizza Hut stores. Both transactions are expected to be finalized in the third quarter.
According to Fortune, the chain had also looked to close 250 U.S. restaurants.
