Source: AdAge
Photo Credit: Investors had been expecting Yum to offload Pizza Hut, which it has owned since the restaurant company spun off in 1997 from PepsiCo Inc. (Michael Nagle/Bloomberg)
Yum Brands Inc. is selling its struggling Pizza Hut division for $2.7 billion, allowing the restaurant operator to focus on its better-performing KFC and Taco Bell chains.
Private equity firm LongRange Capital will acquire Pizza Hut excluding China for $1.5 billion, Yum stated Tuesday. Yum China Holdings Inc. will buy the rest of the business for $1.2 billion. The transactions are expected to close in the third quarter.
Yum’s shares rose as much as 3.6%. The stock had gained 2.2% this year through Monday’s close, compared with a roughly 10% advance for the S&P 500 Index.
Investors had been expecting Yum to offload Pizza Hut, which it has owned since the restaurant company spun off in 1997 from PepsiCo Inc., which had acquired it two decades earlier.
It’s faced increasing competition in recent years, both within the pizza market and the broader restaurant industry.
Domino’s pressure
Domino’s trumped it in numerous areas, including menu innovation, marketing, ordering technology and delivery infrastructure, said Neil Saunders, managing director at GlobalData. Pizza Hut also is a less popular option for casual diners who are eating in, as they look for larger menus and more contemporary environments, he said.
Pizza Hut’s share of Yum’s revenue has declined every year since 2019, shrinking to about 12% in 2025 from more than 18% six years earlier, according to data compiled by Bloomberg. During that period, Pizza Hut’s sales have hovered just above $1 billion, while Yum’s revenue grew by about 47% to $8.2 billion last year.
The deal will leave Yum with KFC, its largest brand at $3.5 billion in annual sales, Taco Bell ($3 billion) and Habit Burger & Grill ($570 million).
“Pizza Hut has dragged on the otherwise solid results from the group,” Saunders said in his note. “In essence, the good numbers from KFC and Taco Bell have been clouded by the ongoing sales slides and profit slips at Pizza Hut.”
For Yum China, acquiring Pizza Hut in China will give it control of what it described as the largest casual dining brand in the country with segment revenue of $2.3 billion last year. It plans to boost locations to more than 6,000 by 2028 from roughly 4,400 at the end of March.
