Yum! Brands offloads Pizza Hut to private equity

American fast food corporation, Yum! Brands has agreed to sell Pizza Hut in a deal worth $2.7 billion, ending decades of ownership of the iconic chain.

The move reflects the very different performance of Pizza Hut in China compared with other markets.

Investors cheered the news, sending Yum shares 2% higher by the close.

Under the agreement, US private equity firm LongRange Capital will acquire Pizza Hut’s international business, excluding mainland China, for $1.5 billion, while the remainder will be sold to Yum China for $1.2 billion.

Yum said the new ownership structure will give Pizza Hut access to restaurant industry expertise and resources needed to support future growth.

LongRange Capital founder Bob Berlin said he plans to work closely with Pizza Hut’s management team and franchisees to strengthen the business.

The sale comes after several years of weak performance. Pizza Hut has struggled to keep pace with sister brands KFC and Taco Bell and has lost market share to rivals such as Domino’s. 

Earlier this year, Yum announced plans to close 250 underperforming US locations, although the chain still operates more than 6,000 restaurants nationwide.

Industry analysts say Pizza Hut faces growing competition from delivery-focused platforms and changing consumer habits, making a turnaround increasingly challenging. The company’s US sales fell 8.2% last year, highlighting the pressures that ultimately led Yum to seek a buyer.