Louisville, Ky. — Yum! Brands Inc., the Louisville-based operator of the Pizza Hut, Taco Bell and KFC franchises, has entered into an agreement to sell the Pizza Hut chain across two separate transactions with a combined value of $2.7 billion.
LongRange Capital, a private equity firm based in Stamford, Conn., has agreed to purchase Pizza Hut outside of mainland China for approximately $1.5 billion. The company is financing its acquisition using funds from UBS Investment Bank.
Yum China Holdings Inc., which is based in Shanghai and was spun off from Yum! Brands in 2016, is acquiring the Pizza Hut holdings in mainland China for approximately $1.2 billion. Yum China says it is financing its acquisition using a combination of cash and debt financing.
Yum! Brands announced in November that it began exploring strategic options for the Pizza Hut vertical. Founded in 1958, Pizza Hut is considered the second-largest pizza brand in the world with more than 15,500 restaurants in 108 countries globally and approximately $10 billion in annual system-wide sales, according to LongRange Capital.
“Under LongRange and Yum China, Pizza Hut will be well-positioned for future growth with ownership that brings deep expertise in the restaurant industry,” says Chris Turner, CEO of Yum! Brands. “Pizza Hut is one of the most iconic restaurant brands in the world, and we are proud of the important role it has played in Yum!’s history.”
Across the two transactions, Yum! Brands expects to receive approximately $2.3 billion of net proceeds after taxes, closing adjustments and transaction-contingent fees, excluding a potential $75 million earn-out from LongRange by 2030. Yum! Brands also expects to incur one-time expenses of approximately $85 million during the remainder of 2026 to “effectuate the separation.”
Yum! Brands’ board of directors has unanimously approved both transactions, which are expected to close in the third quarter, subject to customary closing conditions. Following the close of the transactions, Yum! will no longer report on the Pizza Hut division but will continue to provide its Byte by Yum! proprietary technology and “certain corporate services” under a transition services agreement for the Pizza Hut brand (excluding mainland China).
Yum China expects to grow the Pizza Hut brand in China, where it is already the No. 1 casual dining restaurant brand with 4,375 restaurants across 1,100 cities. Yum China aims to operate more than 6,000 Pizza Hut restaurants in China by 2028.
“Moving from the exclusive licensee to the brand owner of Pizza Hut in mainland China represents a transformative milestone for us, demonstrating our conviction and long-term commitment to the China market,” says Joey Wat, CEO of Yum China. “We see tremendous opportunities ahead, and we are still only at the early stage of our planned growth trajectory for Pizza Hut China.”
Yum! Brands also announced it will “further advance long-term growth plans” with Yum China for the KFC and Taco Bell locations in mainland China.
The stock price for Yum! Brands closed at $154.67 per share on Monday, June 15, the last full day of trading prior to the announcement. That figure represents a nearly 9 percent increase from $141.94 a year ago.
The stock price for Yum China on Monday was $44.25 per share, up slightly from $43.82 last year.
— John Nelson