Yum Brands sells Pizza Hut in $2.7 billion split deal

Yum! Brands, one of the world’s largest restaurant companies, has sold Plano-based Pizza Hut for $2.7 billion in two different deals, the company announced on Tuesday.  

Everywhere except mainland China, the pizza brand will be acquired by LongRange Capital, a private equity firm based in Connecticut. In mainland China, the brand will be acquired by Yum China Holdings, a Shanghai-based company that spun off from the larger Yum! Brands conglomerate and now ranks as China’s largest restaurant company. 

The blockbuster purchase deals came after Yum! Brands executives undertook a monthslong “comprehensive review of strategic options” for Pizza Hut, Yum Brands! said in a news release. Pizza Hut, a nearly 70-year-old company and one of the world’s most recognizable pizza restaurants, has lately been struggling as some of its longtime rivals, including Domino’s, have gained market share. 

The deals allow Yum! Brands “to be a more focused company” and better deliver value to shareholders, Chris Turner, the company’s CEO, said in a statement. 

“Under LongRange and Yum China, Pizza Hut will be well positioned for future growth with ownership that brings deep expertise in the restaurant industry,” Turner said. 

A representative for Pizza Hut did not immediately respond on Tuesday for a request for comment. 

Under the terms of the deal with LongRange Capital, the private equity firm will pay approximately $1.5 billion for Pizza Hut outside of mainland China, with Yum! Brands also eligible for an additional $75 million payout by 2030. Yum China will pay approximately $1.2 billion for Pizza Hut in mainland China. 

The deal was unanimously approved by Yum!’s board, and both transactions are expected to close in the third quarter of this year, according to a release. On Tuesday Yum! Brands’ share price was up modestly on the news. 

Pizza Hut, a brand that operates some 20,000 stores around the world, has its global headquarters at a 20-acre, amenity-rich campus in Plano. Early last year Yum! Brands, which is based in Louisville, announced it was moving its headquarters for KFC, another major Yum! company, to the same location, along with around 100 employees.