A major pizza chain, which has nearly 20,000 branches across the world, is set to be sold in a £2billion deal following a period of significant challenges. Pizza Hut, known for its delicious pizzas, will be sold by its parent company Yum! Brands, excluding Chinese operations, to private equity firm LongRange Capital for £1.1 billion, it was announced on Tuesday.
The transaction will cover the group’s UK operations, which Yum took over last year after stepping in to rescue the business from administration following the collapse of its former operator, DC London Pie. At the same time, Yum has announced plans to divest its Pizza Hut China arm to Yum China in a deal valued at £890 million.
Pizza Hut began in 1958 in Wichita, Kansas, when it was founded as a small pizza restaurant that later grew into a global brand. For many years, it was owned by PepsiCo, which used its resources and distribution network to expand the business internationally.
In 1997, PepsiCo decided to separate its restaurant division into a new independent company called Yum! Brands, allowing Pizza Hut to operate alongside other fast-food chains with a stronger focus on growth and the restaurant industry.
Chris Turner, chief executive of Yum! Brands, said: “Under LongRange and Yum China, Pizza Hut will be well positioned for future growth with ownership that brings deep expertise in the restaurant industry.
“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.”
The chain has around 20,000 stores in more than 100 countries, but the company gets nearly half its sales from the US, where it has about 6,500 stores.
In October last year, Yum bought Pizza Hut’s UK operations after DC London Pie, the firm running Pizza Hut’s UK dine-in restaurants, fell into administration.
The UK chain closed 68 restaurants and 11 delivery outlets, putting around 1,210 jobs at risk as a result.
However, approximately 64 of those restaurants were preserved after Yum stepped in with a rescue deal.