Yum Brands announced the sale of Pizza Hut to LongRange Capital for about $1.5 billion, while Yum China will acquire the chain's locations in mainland China for approximately $1.2 billion.
This strategic decision is expected to yield around $2.3 billion in net proceeds for Yum after accounting for taxes and fees, although the company will incur one-time expenses of about $85 million related to the transactions.
The sale comes after years of declining performance for Pizza Hut, which has struggled to compete with rivals like Domino's Pizza and has lost market share due to the rise of third-party delivery services.
Yum's leadership believes that selling Pizza Hut will provide the best opportunity to enhance shareholder value and allow the brand to operate under a structure better suited to its market dynamics. This marks a significant shift for Pizza Hut, which has been part of Yum's portfolio alongside Taco Bell and KFC since the late 1990s, following its acquisition by PepsiCo in 1977.
The divestiture reflects a broader strategy by Yum to streamline its operations and focus on more profitable ventures