Yum Brands said on Tuesday it would sell its Pizza Hut chain for US$2.7 billion(HK$21.06 billion), as the unit struggles with stiff competition in the fast-food market and cautious consumer spending.
Pizza Hut in Mainland China will be acquired by Yum China(9987) for US$1.2 billion while the rest of the business will be acquired by private equity firm LongRange Capital for US$1.5 billion, the company said.
The move follows Yum entering exclusive talks with LongRange in May, after it said it was reviewing strategic options, including a possible sale, for Pizza Hut, as the unit fell behind Yum's other fast-casual dining brands such as Taco Bell.
The fast-food industry is contending with sustained demand weakness, as growing adoption of GLP-1 weight-loss drugs encourages consumers to choose healthier foods.
The pressure has been compounded by rising inflation and a decline in consumer sentiment that has weighed on US pizza giants already facing elevated commodity costs.
Reuters
