New Delhi, June 16 (ANI): Yum! Brands Inc. on Tuesday announced that it has agreed to sell Pizza Hut’s businesses outside China and in China in two separate deals worth about $2.7 billion combined. The moves will generate roughly $2.3 billion after taxes and fees, while the company doubles down on KFC China and expands Taco Bell in mainland China.
Under the terms of the agreements, Yum! will sell Pizza Hut Ex-China to LongRange for approximately $1.5 billion and Pizza Hut China to Yum China for approximately $1.2 billion. Yum! also has “the opportunity to receive an earn-out of $75 million by 2030” from the LongRange deal, the company said in a release.
Across both transactions, Yum! expects about $2.3 billion in net proceeds after taxes, closing adjustments and transaction-contingent fees, excluding the earn-out. One-time separation costs are estimated at about $85 million during the remainder of 2026.
Both transactions have been unanimously approved by Yum!’s Board of Directors and are slated to close in the third quarter of 2026, subject to customary closing conditions, including regulatory approvals. After the deals close, Yum! will no longer report on the Pizza Hut division.
Yum! said it will continue to provide Byte by Yum!, its proprietary technology platform, to Pizza Hut Ex-China. It will also provide certain corporate services under a transition services agreement to support an orderly separation. Fees from those services in 2026 are expected to offset corporate general and administrative expenses historically allocated to Pizza Hut.
On the partnership front, “Yum! Brands and Yum China remain fully committed to a strong partnership that unlocks growth in their joint businesses going forward,” according to the company.
The companies agreed to financial incentives that will generate value for both sets of shareholders if KFC China’s system sales growth accelerates. They also plan to work together to further advance long-term growth plans for Taco Bell in mainland China.
For capital allocation, Yum! plans to use the after-tax proceeds to invest in the business and return excess capital to shareholders. Concurrent with the deal approval, the board authorized an additional $4 billion for share repurchases.
Management said it will provide more details on the financial impact and any updates to its 2026 guidance during Yum!’s second-quarter earnings call on July 30, 2026.
Barclays and Goldman Sachs advised Yum! on the transactions, while Weil, Gotshal & Manges and Mayer Brown served as legal counsel. (ANI)
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