Pizza Hut, a struggling restaurant chain, will be sold for $2.7 billion by its parent company Yum Brands. Yum Brands announced in February that it was considering selling Pizza Hut and planned to close 250 U.S. restaurants. The pizza chain has faced challenges with outdated stores and increasing competition.
Pizza Hut was founded in 1958 in Wichita, Kansas. It was acquired by PepsiCo in 1977 but was spun off as part of Yum Brands in 1997. Private equity firm LongRange Capital is purchasing Pizza Hut, excluding its mainland China business, for approximately $1.5 billion. Yum China Holdings Inc. will buy the mainland China Pizza Hut for about $1.2 billion.
According to Yum Brands CEO Chris Turner, under the new ownership, Pizza Hut will be well-positioned for future growth with owners who bring deep expertise in the restaurant industry. Yum Brands, which also owns KFC and Taco Bell, began a strategic review to explore options for Pizza Hut in November due to declining sales at comparable stores.
Neil Saunders, managing director of GlobalData, stated that Pizza Hut has long been the weak link in Yum’s portfolio. Despite efforts to revitalize the brand and shut underperforming locations, it has become clear that pushing the division back into growth will require a level of investment and patience that Yum is not prepared to commit to. By selling Pizza Hut, Yum Brands can focus more on its brands with stronger sales.
Original reporting: NBC Connecticut (Hartford) — read the source article.
