Yum! Brands, Inc. announced Tuesday its definitive agreement to sell its popular brand Pizza Hut in two separate deals for $2.7 billion in the aggregate, subject to certain purchase price adjustments. Further, the firm's Board of Directors approved an incremental $4 billion share repurchase authorization, which will be conducted with the net after-tax proceeds.
Yum!, which also owns iconic brands KFC and Taco Bell, annonced that Pizza Hut, excluding Mainland China, will be acquired by private equity firm LongRange Capital for approximately $1.5 billion. Yum! holds the chance to receive an earn-out of $75 million by 2030.
Further, Pizza Hut in Mainland China will be acquired by Yum China Holdings, Inc. (YUMC, 9987.HK) for around $1.2 billion.
On the NYSE, Yum! Brands shares are up 2.8 percent, trading at $158.95, while Yum China shares are down 2%, at $43.36.
With both deals, Yum! expects to receive around $2.3 billion of net proceeds after taxes, closing adjustments and transaction-contingent fees, excluding the earn-out. One-time expenses of approximately $85 million are expected during the remainder of 2026 to effectuate the separation.
The decision follows a comprehensive review of strategic options for Pizza Hut that commenced in November 2025. As per the review, a sale was determined to be the strongest path to provide the unit an ownership structure tailored to its distinct markets, competitive strengths and long-term priorities.
Chris Turner, Chief Executive Officer, Yum! Brands, said, "Under LongRange and Yum China, Pizza Hut will be well positioned for future growth with ownership that brings deep expertise in the restaurant industry. Pizza Hut is one of the most iconic restaurant brands in the world, and we are proud of the important role it has played in Yum!'s history."
The transactions, which have been unanimously approved by Yum!'s Board of Directors, will be closed in the third quarter of 2026, subject to customary closing conditions. Following the deals closure, Yum! will no longer report on the Pizza Hut division.
Yum! said it will continue to provide Byte by Yum!, its proprietary technology platform, as well as certain corporate services to Pizza Hut Ex-China under a transition services agreement. Fees received for these services in 2026 would offset Yum! corporate G&A expenses historically allocated to Pizza Hut.
The company plans to release further sale-related information, including any related updates to its 2026 financial outlook, during the second-quarter earnings conference call scheduled for July 30.
In the transactions, Barclays and Goldman Sachs are serving as financial advisers to Yum!, while Weil, Gotshal & Manges LLP and Mayer Brown LLP are its legal advisers.
Yum! Brands and its units franchise or operate more than 63,000 restaurants in 155 countries and territories under KFC, Taco Bell, Pizza Hut and Habit Burger & Grill brands.
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