Yum! Brands, the parent company of Pizza Hut, said it has sold the veteran pizza chain in a deal worth about $2.7 billion, ending nearly three decades of efforts to revive the brand. The transaction marks a split between Pizza Hut's businesses outside China and in China, with the deals expected to close in the third quarter.
LongRange Capital will buy Pizza Hut's operations outside China for about $1.5 billion. Yum China Holdings will take over the company’s China business for another $1.2 billion. Pizza Hut was founded in 1958 in Wichita, Kansas.
The chain has struggled with outdated stores, falling sales, and intensifying competition from other pizza brands. Neil Saunders, managing director of the research firm GlobalData, told AP that “Pizza Hut has long been the weak link in Yum's brand portfolio.” He said that despite efforts to refresh the brand and close unprofitable locations, restoring profitability would require an investment and patience that Yum! Brands is not willing to provide.
The sale will allow Yum! Brands, which also owns KFC and Taco Bell, to focus on its stronger-performing brands. Shares in the company slipped slightly after the announcement.
