One of America’s most recognizable restaurant brands is getting new owners after years of declining sales.
Yum! Brands announced Tuesday that it is selling Pizza Hut in a deal valued at approximately $2.7 billion. The transaction will split ownership of the pizza chain between a U.S. private equity firm and a Chinese restaurant company.
Under the agreement, Pizza Hut’s business outside mainland China will be sold to LongRange Capital for $1.5 billion. Meanwhile, Pizza Hut China will be sold by Yum! China for $1.2 billion.
“These transactions enable Yum! to be a more focused company that continues to leverage scale, technology and talent to accelerate our raising the B.A.R. priorities and deliver sustained value for our stakeholders,” said Chris Turner, Chief Executive Officer, Yum! Brands in a press release. “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. Pizza Hut was built by the passion and dedication of our team members, employees and franchisees, and we’re excited for the next chapter.”
The sale comes during a challenging period for the company. According to Yum! Brands, Pizza Hut’s sales growth has lagged behind the company’s other major brands, including KFC and Taco Bell.
Earlier this year, Yum! Brands announced plans to close 250 Pizza Hut locations across the United States. The chain currently operates more than 6,000 restaurants nationwide.
Industry analysts say Pizza Hut has struggled to keep pace with competitors, particularly Domino’s, which has gained market share through stronger delivery operations, online ordering technology, menu innovation, and marketing efforts.
Yum! Brands first revealed in November that it was exploring strategic options for Pizza Hut following declining comparable-store sales.
Pizza Hut was founded in 1958 in Wichita, Kansas, and grew into one of the world’s largest pizza chains. PepsiCo acquired the company in 1977 before spinning off its restaurant division in 1997, creating what is now Yum! Brands.
The sale marks one of the biggest restaurant industry deals of the year and could signal major changes ahead for the iconic pizza brand as new owners attempt to revive growth and compete in an increasingly crowded market.
