Key facts
- Yum Brands is selling Pizza Hut for a total of $2.7 billion.
- Long Range Capital will acquire Pizza Hut's operations outside mainland China for $1.5 billion.
- Yum China will acquire Pizza Hut's mainland China operations for $1.2 billion.
- The sale is attributed to struggles with competition, outdated stores, and cautious consumer spending.
- Pizza Hut was founded in 1958 and has a history with PepsiCo and Yum Brands.
Yum Brands is selling its struggling Pizza Hut chain for a total of $2.7 billion, with operations divided between private equity firm Long Range Capital and Yum China. Long Range Capital will acquire the majority of Pizza Hut's global operations for $1.5 billion, while Yum China will purchase the mainland China business for approximately $1.2 billion.
The sale comes after years of difficulty for Pizza Hut, which has faced intense competition from rivals like Domino's Pizza and the rise of third-party delivery apps. The company has also grappled with outdated stores and cautious consumer spending, factors exacerbated by the growing popularity of weight-loss drugs impacting demand for high-calorie foods.
Yum Brands stated that the strategic review concluded the sale would provide the strongest path to maximize shareholder value and position Pizza Hut for long-term growth under new ownership with deep industry expertise. Pizza Hut, founded in 1958, was previously owned by PepsiCo before being spun off in 1997 to form Yum Brands in 2002.
The company had previously confirmed in November that Pizza Hut's potential might be better executed outside of Yum Brands' ownership and had unveiled plans to close 250 of its U.S. stores. The UK operations have also faced significant challenges, with the firm operating British restaurants collapsing into administration in October of the previous year, leading to job losses.