Pizza Hut Sold for $2.7 Billion as Yum Brands Refocuses

Yum Brands is selling its Pizza Hut chain for $2.7 billion. The decision follows a review initiated in November and comes as the chain faces challenges such as outdated stores and strong competition. The sale excludes the mainland China operations. Yum Brands’ CEO, Chris Turner, stated that this move aligns Pizza Hut for future growth under new ownership.

Private equity firm LongRange Capital will acquire the Pizza Hut chain excluding mainland China for $1.5 billion. Meanwhile, Yum China Holdings Inc. will purchase the mainland China business for approximately $1.2 billion. These transactions are expected to finalize in the third quarter.

Pizza Hut began in 1958 in Wichita, Kansas. Once acquired by PepsiCo in 1977, it became part of Yum Brands after a spin-off in 1997. Yum Brands also owns KFC and Taco Bell.

Challenges have plagued Pizza Hut, including declining sales at existing locations. Neil Saunders, from GlobalData, noted the brand has long been seen as underperforming within Yum’s portfolio. While efforts were made to revitalize Pizza Hut and close underperforming U.S. locations, significant investment and patience are needed, which Yum Brands is not willing to provide.

By divesting Pizza Hut, Yum Brands can concentrate on stronger brands. The company is headquartered in Louisville, Kentucky. Its stock saw a slight dip before the market’s opening.