(Bloomberg) — Yum! Brands Inc. is selling its struggling Pizza Hut division for $2.7 billion, allowing the restaurant operator to focus its efforts on the KFC and Taco Bell chains, which have been performing better.
Private equity manager LongRange Capital will acquire Pizza Hut, excluding the operation in China, for US$1.5 billion [R$ 7,65 bilhões, na conversão atual]Yum said in a statement this Tuesday. Yum China Holdings Inc. will buy the remainder of the business for US$1.2 billion [R$ 6,12 bilhões, na conversão atual]. The transactions are expected to be completed in the third quarter.
Yum shares rose as much as 3.6% on Tuesday morning in New York. As of Monday’s close, the stock was up 2.2% for the year, below the S&P 500’s 10% advance.
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Investors had already expected Yum to divest Pizza Hut, a brand it has controlled since the restaurant company was spun off from PepsiCo Inc. in 1997. The sale should help Yum sharpen its focus, said Michael Halen of Bloomberg Intelligence.
“This allows them to redirect their resources, their people, their energy and their capital towards one network with very strong growth and one with very solid growth,” he said.
Bloomberg reported in May that LongRange had begun exclusive talks with Yum to buy Pizza Hut. Last year, the company said it was conducting a strategic review after years of trying to revive stagnant sales at the chain known for its thick, buttery pizzas.
Domino’s has surpassed Pizza Hut in areas such as menu innovation, marketing, ordering technology and delivery infrastructure, said Neil Saunders, managing director of GlobalData. According to him, Pizza Hut is also a less popular option among consumers who prefer to eat in the dining room, as this public seeks broader menus and more contemporary environments.
Pizza Hut’s U.S. operation has lagged its peers in recent years, according to data from restaurant industry research firm Technomic Inc. The category gained momentum when Americans began ordering food at home during the pandemic, but sales have since lost steam. The networks launched a series of promotions to increase traffic. Pizza Hut has had a hard time competing.
“This is as promotional an environment as any I’ve ever seen,” Halen said. At Pizza Hut, “the product quality wasn’t good, and real estate here in the U.S. was a problem. You have these big stores, and no one is going to them to sit and eat.”
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Pizza Hut’s share of Yum’s revenue has fallen every year since 2019, falling to about 12% in 2025 from more than 18% six years earlier, according to data compiled by Bloomberg. During that period, Pizza Hut’s revenue was around $1 billion, while Yum’s revenue grew about 47% to $8.2 billion last year.
With the deal, Yum will own KFC, its largest brand, with US$3.5 billion in annual sales, Taco Bell (US$3 billion) and Habit Burger & Grill (US$570 million).
“Pizza Hut weighed on otherwise solid results for the group,” Saunders wrote in the report. “In essence, KFC and Taco Bell’s strong numbers were overshadowed by Pizza Hut’s continued sales declines and profit declines.”
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For Yum China, acquiring Pizza Hut in China will give the company control of what it describes as the country’s largest casual dining brand, with segment revenue of $2.3 billion last year. The company plans to expand the number of units to more than 6,000 by 2028, up from about 4,400 at the end of March.
LongRange, based in Stamford, Connecticut, also owns companies such as 24 Hour Fitness.
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