Yum! will sell Pizza Hut, excluding the brand’s business in mainland China, to Connecticut-based private equity firm LongRange Capital for $1.5bn.
In a separate deal, Pizza Hut China will be acquired by Yum China for $1.2bn.
Across the two transactions, Yum! expects to receive approximately $2.3bn of net proceeds after taxes, closing adjustments and transaction-contingent fees.
Additionally, the deal with LongRange gives the US fast food group the opportunity to receive an earn-out of $75m by 2030.
“Under LongRange and Yum China, Pizza Hut will be well positioned for future growth with ownership that brings deep expertise in the restaurant industry,” says Chris Turner, CEO at Yum! Brands.
“Pizza Hut is one of the most iconic restaurant brands in the world, and we are proud of the important role it has played in Yum!’s history.
“It was built by the passion and dedication of our team members, employees and franchisees, and we’re excited for the next chapter.”
The deal comes after Yum! announced a formal review of strategic options for its struggling Pizza Hut brand back in November. It said the pizza the brand had faced ‘business and category challenges’, and its performance now required ‘additional action’.
In February this year, Pizza Hut said it would close 250 site across the US, which would enable Yum! to be a more focused company that ‘continues to leverage scale, technology and talent’.
Pizza Hut operates around 20,000 locations across the world.