Yum Brands to Sell Pizza Hut for $2.7 Billion

Yum Brands is set to sell the Pizza Hut restaurant chain for $2.7 billion. This decision follows consideration by the company since February, which included plans to close 250 U.S. locations. Pizza Hut has faced challenges such as outdated outlets and increased competition.

Founded in 1958 in Wichita, Kansas, Pizza Hut was acquired by PepsiCo in 1977. PepsiCo eventually spun off its restaurant division in 1997, giving rise to Yum Brands. LongRange Capital, a private equity firm, is purchasing Pizza Hut for around $1.5 billion. This sale excludes the mainland China operations, which Yum China Holdings Inc. will acquire for about $1.2 billion.

“Under LongRange and Yum China, Pizza Hut will be well positioned for future growth with ownership that brings deep expertise in the restaurant industry,” stated Yum Brands CEO Chris Turner. Yum Brands, which also includes KFC and Taco Bell, has been reviewing Pizza Hut’s performance, noting declining sales in comparable stores since November.

Neil Saunders, managing director of GlobalData, described Pizza Hut as Yum’s “weak link.” He explained that despite efforts to rejuvenate the brand, turning the division around would need investment and commitment beyond Yum’s current willingness.

The sale allows Yum Brands to concentrate on its stronger-performing brands. Based in Louisville, Kentucky, the company expects the transactions to finalize in the third quarter. The announcement led to a slight dip in Yum Brands’ stock price before market opening.