There is a big announcement from Pizza Hut brands that is sad and good too. The sad part is that Yum Brands is selling the Pizza Hut brand to Yum China and LongRange Capital at a valuation of $2.7 billion. The good news is that Pizza Hut's mainland China business is excluded from this deal.
LongRange Capital is acquiring the Pizza Hut brand for $1.5 billion, while Yum China is currently operating the franchise in the country and will acquire the remaining franchise at $1.2 billion. This transaction will happen in two deals. Yum Brands CEO Chris Turner said that this will help the company continue to offer sustained value for stakeholders and would help to leverage technology, talent, and scale in a press release. Under these two companies, Pizza Hut will grow because both Yum China and LongRange bring expertise in the restaurant industry.
Pizza Hut was built by the dedication and passion of our franchises, employees, and team members, and we are excited for a new beginning. Yum Brands is owned by Pizza Hut International; it will soon be handed to LongRange Capital in India, and the franchise is run by Devyani International.
The company said that the board decided in November last year that selling the brand would maximize shareholder value, and this will offer a proper ownership structure to the pizza chain.
This decision will also support the long-term growth of Pizza Hut. Yum Brands is a US-based company that expects to incur one-time separation costs of $85 million, and this would generate $2.3 billion in net proceeds after taxes, transaction-related fees, and closing adjustments.
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