Yum Brands logo<\/p>\n
Dado Ruvic | Reuters<\/p>\n
India’s KFC and Pizza Hut operators, Sapphire Foods India<\/a>\u00a0and Devyani International<\/a>, said on Thursday they will merge in a $934 million deal, creating a fast-food franchisee powerhouse in the world’s most populous country.<\/p>\n The deal comes as India’s fast-food franchisees grapple with higher costs, slowing same-store sales and margin pressure, while facing stiff competition from McDonald’s MCD.N and Domino’s Pizza DPZ.O operators in a market where consumers are cutting back on non-essential spending.<\/p>\n Devyani will issue 177 shares for every 100 shares of Sapphire as part of the deal and it expects annual synergies of 2.1 billion to 2.25 billion rupees ($23.34 million to $25.01 million) from the second full year of operations of the combined entity.<\/p>\n The companies, partners of Yum Brands YUM.N, run more than 3,000 outlets across India and overseas, including KFC and Pizza Hut dine-in restaurants and compete with the Indian operators of McDonald’s and Domino’s Pizza chains – Westlife Foodworld WEST.NS and Jubilant Foodworks JUBI.NS.<\/p>\n Both the KFC and Pizza Hut franchisees in India operate at a net loss, making scalability a challenge, said Akshay D’Souza, an independent consumer goods consultant.<\/p>\n “With the single entity, if they are able to unlock even half of the expected synergies, we will be seeing a profitable enterprise… where they can control costs better.”<\/p>\n In the quarter ended September, Sapphire’s consolidated total costs rose 10% on-year to 7.68 billion rupees, while Devyani’s spends rose 14.4% to 14.08 billion rupees.<\/p>\n Devyani reported a net loss of 219 million rupees for the quarter ended September 30, reversing a profit of 170,000 rupees a year earlier, while Sapphire posted a wider consolidated net loss of 127.7 million rupees, compared with a loss of 30.4 million rupees a year ago.<\/p>\n ($1 = 89.9625 Indian rupees)<\/p>\n","protected":false},"excerpt":{"rendered":"Yum Brands logo Dado Ruvic | Reuters India’s KFC and Pizza Hut operators, Sapphire Foods India\u00a0and Devyani International,…\n","protected":false},"author":2,"featured_media":382308,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[28,122,186447,2538,4322,186448,28284],"class_list":["post-382307","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-business-news","tag-devyani-international-ltd","tag-food-and-drink","tag-restaurants","tag-sapphire-foods-india-ltd","tag-yum-brands-inc"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/382307","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=382307"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/382307\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/382308"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=382307"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=382307"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=382307"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}