Pizza Hut Sold for $2.7 Billion as Yum! Brands Sheds Its Struggling Chain

Yum! Brands said it has sold Pizza Hut for a total of about $2.7 billion, ending nearly three decades in which the chain struggled to stay relevant. The deal splits the business into two parts: LongRange Capital will buy Pizza Hut’s operations outside China for about $1.5 billion, while Yum China Holdings will take over the chain’s China business for another $1.2 billion.

Both transactions are expected to close in the third quarter of this year. Pizza Hut, founded in 1958 in Wichita, Kansas, had been weighed down by aging stores, falling sales and intensifying competition from other pizza chains.

Neil Saunders, managing director of GlobalData, told AP that “Pizza Hut has long been the weak link in Yum’s brand portfolio.” He said that despite attempts to refresh the brand and close unprofitable locations, making Pizza Hut profitable again would require a level of investment and patience that Yum! Brands is not willing to provide.

The move will let Yum! Brands, which also owns KFC and Taco Bell, focus on brands with stronger performance. Even so, the company’s shares fell slightly after the announcement.