Yum brands sells Pizza Hut for $2.7 billion amid fast-food industry pressures

Yum Brands said on Tuesday it would sell Pizza Hut for $2.7 billion, marking the end of its ownership of the pizza chain as the fast-food industry grapples with intense competition and weaker consumer spending.

Under the deal, Yum China Holdings will acquire Pizza Hut's mainland China operations for $1.2 billion, while private equity firm LongRange Capital will purchase the remainder of the business for $1.5 billion.

The transaction follows mounting pressure on US pizza chains, which have faced softer demand amid elevated inflation and higher commodity costs. The growing popularity of GLP-1 weight-loss drugs has also prompted some consumers to shift toward healthier food choices.

"Long Range is essentially buying a globally recognized brand that needs greater focus, while Yum China's move gives local operators more control over a key market," said Sam North, market analyst at eToro.

"The price is not spectacular for such a well-known name, but it removes an ongoing burden and gives Pizza Hut the opportunity to be managed as a turnaround and recovery story," he added.

Yum said last year it was exploring strategic alternatives for Pizza Hut after several consecutive quarters of declining sales. The company entered exclusive talks with Long Range Capital in May.

Pizza Hut was acquired by PepsiCo in 1977 and was spun off in 1997 alongside KFC and Taco Bell to form the company that later became Yum Brands in 2002.

Yum, which will retain ownership of Taco Bell and KFC, expects the transaction to close in the third quarter of 2026, subject to regulatory approvals.

The sale of the China business reflects a broader trend among US companies to hand greater control to local operators as they adapt to tougher competition and changing consumer demand in the Chinese market.