Yum Brands said it is selling Pizza Hut, the American pizza chain, to private equity firm LongRange Capital for $1.5 billion. The deal does not include Pizza Hut’s China operations, which will be sold separately to Yum China for $1.2 billion. Together, the transactions value the business at $2.7 billion.
The sale follows years of slowing Pizza Hut sales that have weighed on Yum’s financial performance. At the same time, rival Domino’s Pizza has gained market share, and delivery apps such as DoorDash have taken a slice of the chain’s sales. Yum said in November that it was exploring strategic options for Pizza Hut.
In a statement on Tuesday, the company said senior management and the board concluded that selling Pizza Hut would create the “strongest path” to maximize shareholder value and give the chain an ownership structure suited to its “unique markets, competitive strengths and long-term goals.” Yum CEO Chris Turner said that under LongRange and Yum China, Pizza Hut would be better positioned for future growth because of ownership with deeper restaurant-industry expertise. He also called Pizza Hut “one of the most recognized restaurant brands in the world” and said the company was excited for its next chapter.
Pizza Hut was founded in 1958 by Dan and Frank Carney in Wichita, began franchising a year later, and went public in 1969. It became the world’s largest pizza chain two years after its IPO and held that title until 2017, when Domino’s overtook it. PepsiCo bought Pizza Hut in 1977 and later spun off its restaurant division in 1997, creating Yum. Yum now operates more than 63,000 restaurants in 155 countries.
