Yum to sell Pizza Hut for $2.7bn after weak demand

NEW YORK: Yum Brands said on Tuesday it will sell Pizza Hut in a $2.7 billion breakup of the chain, as the business has struggled with intense competition in the fast-food market and more cautious consumer spending.

Under the deal, Yum China will buy Pizza Hut’s mainland China operations for $1.2 billion, while private equity firm LongRange Capital will acquire the rest of the business for $1.5 billion, the company said.

The company had said last year that it was reviewing strategic options for Pizza Hut after several quarters of declining sales. The divestment comes after Yum entered exclusive talks with LongRange in May. Pizza Hut also trailed Yum’s other fast-casual brands, including Taco Bell, and accounted for about 12% of Yum’s total revenue in 2025.

Higher inflation and elevated commodity costs have added pressure on major US pizza chains, which were already facing prolonged weak demand. The wider market has also been affected by growing use of GLP-1 weight-loss drugs, which has encouraged some consumers to opt for healthier food choices.

Yum Brands CEO Chris Turner said the transactions would sharpen the company’s structure.

"These transactions enable Yum! to be a more focused company,"

Following the sale, Yum will be left with its Taco Bell and KFC chains. Its shares were up about 1% in premarket trading.

Pizza Hut was bought by PepsiCo in 1977 and was later spun off in 1997 along with KFC and Taco Bell to create a restaurant company that adopted the Yum Brands name in 2002.

Yum China Holdings, a Shanghai-based spin-off of Yum Brands, owns and franchises more than 18,000 stores in China, including around 13,000 KFC outlets. Reuters had reported in April that LongRange, Sycamore Partners and Apollo Global Management were among the parties competing for Pizza Hut.