Yum Brands to sell Pizza Hut for $2.7B after prolonged demand slump

June 16 (Reuters) – Yum Brands said on Tuesday it would sell its Pizza Hut chain for $2.7 billion, as the unit struggles with stiff competition in the fast-food market and cautious consumer spending.

Pizza Hut in Mainland China will be acquired by Yum China for $1.2 billion, while the rest of the business will go to private equity firm LongRange Capital for $1.5 billion, the company said.

Rising inflation and elevated commodity costs have weighed on U.S. pizza giants already facing sustained demand weakness, as growing adoption of GLP-1 weight-loss drugs encourages consumers to choose healthier foods.

Last year, Yum Brands said it was exploring strategic options for the chain after several quarters of sales decline. Pizza Hut accounted for about 12% of Yum’s total revenue in 2025.

The sale follows Yum entering exclusive talks with LongRange in May, as the unit also fell behind Yum’s other fast-casual dining brands such as Taco Bell.

“These transactions enable Yum! to be a more focused company,” Yum Brands CEO Chris Turner said.

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

Shares of Yum, which will now be left with just its Taco Bell and KFC chains, were up about 1% in premarket trading.

Yum China Holdings, a Shanghai-based spin-off of Yum Brands, owns and franchises more than 18,000 stores in the country, including roughly 13,000 locations for KFC.

Reuters reported in April that LongRange, Sycamore Partners and Apollo Global Management, among others, were vying for Pizza Hut.

(Reporting by Neil J Kanatt and Koyena Das in Bengaluru; Editing by Devika Syamnath)