Prime Highlights:
- Devyani International and Sapphire Foods India plan to merge, creating one of the largest Yum! Brands’ franchisees in India.
- The merger is expected to accelerate KFC expansion and revitalize Pizza Hut across the country.
Key Facts:
- Devyani International will issue 117 shares for every 100 shares of Sapphire Foods India, in a deal valued at around $934 million.
- The combined company will manage over 2,867 restaurants across India, covering KFC, Pizza Hut, and Taco Bell, and is expected to generate annual synergies of ₹2.1–2.2 billion ($23–25 million).
Background:
Shares of Devyani International, the leading operator of KFC and Pizza Hut in India, jumped by as much as 5.3% after the company announced plans to merge with rival Sapphire Foods India. The move is seen as a major step in Yum! Brands’ strategy to expand its footprint in one of its fastest-growing markets.
Under the terms of the merger, Devyani International will issue 117 shares for every 100 equity shares of Sapphire Foods India, a deal reported to be valued at $934 million by Reuters. The merger is expected to be completed in 12 to 15 months, after approval from regulators and shareholders.
The new combined company will manage a large network of Yum! Brands restaurants in India, including over 2,000 outlets run by Devyani International and 867 outlets run by Sapphire Foods India, covering KFC, Pizza Hut, and Taco Bell. The merger is expected to save ₹2.1–2.2 billion ($23–25 million) per year starting from the second year after it is completed.
Yum! Brands’ CFO Ranjith Roy highlighted that India remains a high-priority market with significant growth potential. He added that the merger will create “greater value for both shareholder bases” through enhanced supply chain operations and faster expansion.
Sapphire Foods India, which also runs restaurants in Sri Lanka, will join the merged company to improve brand performance and run operations more efficiently. The merger is expected to revitalize Pizza Hut, which currently trails market leader Domino’s, and accelerate KFC’s expansion across India.
Sumeet Narang, nominee director at Sapphire Foods India, described the move as a key step toward making India a “crown jewel” in Yum! Brands’ global portfolio. With the country hosting the third-highest concentration of Yum! outlets after the U.S. and China, the merger marks a strategic push to consolidate and scale operations in the fast-food sector.
