Yum Brands sells pizza chain to new owners
Yum! Brands is selling Pizza Hut in two deals totaling $2.7 billion as the struggling chain faces declining sales, outdated locations and increased competition.
Private equity firm LongRange Capital will acquire Pizza Hut operations outside mainland China for about $1.5 billion. Yum China Holdings Inc. will purchase the mainland China business for approximately $1.2 billion.
The transactions are expected to close in the third quarter.
Pizza Hut faces challenges
Yum Brands announced earlier this year that it was reviewing options for Pizza Hut after the chain reported falling sales. The company also planned to close about 250 U.S. restaurants as part of efforts to address weaker performance.
Analysts have described Pizza Hut as the weakest-performing brand in Yum’s portfolio, noting that the chain needs major investment to compete with rivals and modernize its restaurants.
New owners focus on growth
Yum Brands CEO Chris Turner said the new ownership groups bring restaurant industry experience that could help position Pizza Hut for future growth.
Pizza Hut was founded in 1958 in Wichita, Kansas, and became part of Yum Brands after PepsiCo spun off its restaurant division in 1997. Yum Brands also owns other major chains, including KFC and Taco Bell.
The sale allows Yum Brands to focus on its stronger-performing restaurant brands while giving Pizza Hut new leadership as it works to rebuild its business.
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