Yum Brands Sells Pizza Hut for $2.7 Billion

Yum Brands has announced the sale of Pizza Hut in a deal worth $2.7 billion. The sale includes two separate transactions. Private equity firm LongRange Capital will acquire Pizza Hut, excluding its mainland China operations, for approximately $1.5 billion. Meanwhile, Yum China Holdings Inc. will purchase the mainland China locations for about $1.2 billion.

This decision comes after Yum Brands, based in Louisville, Kentucky, initiated a strategic review in November to explore options for the struggling pizza chain. According to ABC News, Pizza Hut has faced challenges due to outdated stores and increasing competition, leading to the closure of 250 U.S. restaurants.

Pizza Hut was founded in 1958 in Wichita, Kansas. It was acquired by PepsiCo in 1977, which later spun off its restaurant division as Yum Brands in 1997. Despite efforts to revitalize the brand, Pizza Hut has remained the weak link in Yum's portfolio. Reuters reported that Yum Brands' CEO Chris Turner expressed confidence that under LongRange and Yum China, Pizza Hut will be well-positioned for future growth.

The transactions are expected to close in the third quarter of this year. Yum Brands plans to focus on its more successful brands, such as KFC and Taco Bell, which have shown consistent sales growth.