Yum China rolls out the dough for mainland’s Pizza Huts in US$1.2 billion deal
Though the acquisition would mean full ownership of the restaurant brand in mainland China, the company’s stock price fell after the announcement
Yum China, the operator of KFC and Pizza Hut in mainland China, saw its share price drop after an announcement it would pay US$1.2 billion to acquire full ownership of the Pizza Hut business in its local market.
Operating rights for the brand will be paid for in cash through a combination of existing cash reserves and debt financing, according to a company statement issued on Tuesday. Subject to customary closing conditions, the transaction is expected to be completed in the third quarter of 2026.
Its Hong Kong-traded shares had dropped 2.56 per cent by market close on Wednesday, falling to HK$335.60 apiece.
The deal forms part of Yum Brands’ broader plan to divest its Pizza Hut operations globally. Private equity firm LongRange Capital will acquire the Pizza Hut business outside mainland China for US$1.5 billion.
Once the transaction closes, Yum China will transition from Pizza Hut’s exclusive licensee in mainland China to the brand’s owner, eliminating the need to pay licensing fees to Yum Brands.
“Moving from the exclusive licensee to the brand owner of Pizza Hut in mainland China represents a transformative milestone for us, demonstrating our conviction and long-term commitment to the China market,” Yum China CEO Joey Wat said in the statement.
“We see tremendous opportunities ahead, and we are still only at the early stage of our planned growth trajectory for Pizza Hut China.”