Yum China Holdings will acquire Pizza Hut's operations in China for 1,2 billion USD. Investment firm LongRange Capital will purchase the remaining assets for 1,5 billion USD. This decision comes as Pizza Hut faces intense competition and cautious consumer spending.
Yum anticipates the transaction will conclude in QIII this year, pending regulatory approvals. The company also announced plans to repurchase 4 billion USD in shares. Yum's stock rose nearly 2% during trading on 16/6 following these announcements.
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A Pizza Hut branch in Osaka, Japan, 5/2026. Photo: *Reuters* |
Pizza Hut has faced significant challenges. Earlier this year, it announced plans to close 250 of its more than 6,000 U.S. stores. Last month, the chain was involved in a lawsuit with a franchisee in a Texas court. High inflation and rising commodity costs have pressured U.S. pizza chains, which also contend with declining demand as consumers opt for healthier dining choices.
Sam North, a market analyst at eToro, commented, "LongRange Capital is acquiring a globally recognized brand that requires stronger redirection. Meanwhile, Yum China's move grants local operators greater control over this crucial market."
Since last year, Yum Brands had been evaluating strategic options as Pizza Hut's sales declined for several consecutive quarters. The company began exclusive negotiations with LongRange Capital in May. Chris Turner, CEO of Yum Brands, stated, "These transactions will help Yum become a more focused company."
In China, the sale of this business segment reflects a broader trend of U.S. companies transferring control to local operators. This strategy addresses increasing competition and evolving consumer demand. Earlier this month, General Mills agreed to sell its Haagen-Dazs store system in China to an investor group led by tea chain Ningji. Last year, Starbucks also sold a significant stake in its China operations to Boyu Capital.
Yum China, headquartered in Shanghai, spun off from Yum Brands. It aims to expand the Pizza Hut network to over 6,000 stores by 2028.
Pizza Hut's history dates back to its acquisition by PepsiCo in 1977. In 1997, it spun off Pizza Hut along with KFC and Taco Bell to form the predecessor company to Yum Brands.
By Ha Thu (Reuters)
