Shares of KFC and Pizza Hut Indian operator Devyani jump on merger with rival franchisee Sapphire
CITY CENTER, KOLKATA, WEST BENGAL, INDIA – 2019-06-26: Pizza hut exit at Kolkata City Center Mall. (Photo: Avishek Das/SOPA Images/LightRocket via Getty Images)
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Shares of Indian operator KFC and Pizza Hut Devyani International Up as much as 5.3% after announcing plans to merge with rival franchisee Safir Foods India.
Very good! Brands The company owns fast food chains such as KFC, Pizza Hut and Taco Bell and operates them in India through franchise partners such as Devyani International, Sapphire Foods India and Burman Hospitality.
Deal, Yum! will combine two major franchisee operators for! The brands in India have been merged into a single entity that oversees KFC and Pizza Hut in the country. While Devyani International did not confirm the size of the deal, Reuters reported that the transaction had been completed. worth 934 million dollars.
According to the terms of the merger, Devyani International, problem For every 100 shares of Sapphire Foods India, 117 shares fell, the companies said in a press release.
Shares of Sapphire Foods India fell as much as 6.4% at the open.
The merger is expected to go into effect within 12 to 15 months, subject to regulatory and shareholder approval. The companies said the deal would accelerate KFC’s expansion in the country and help revitalize the market leader’s runner-up, Pizza Hut. Domino’s by a wide margin.
“India is a high priority market for us,” Yum said. Brands’ chief financial officer Ranjith Roy. He added that the country has plenty of room for further growth.
It said the proposed merger would spur accelerated expansion and create “more value for both shareholder bases” through improved supply chain operations.
Devyani International is the largest franchisee of Yum! Brands in India said it expects “synergies” of 2.1 billion rupees to 2.2 billion rupees annually, or about $23 million to $25 million, from the second full year after completion of the merger.
Devyani operates more than 2,000 quick service restaurants in more than 280 cities in India, Nigeria, Nepal and Thailand. Meanwhile, Sapphire operates 529 KFC and 338 Pizza Hut restaurants in India, as well as 119 Pizza Hut and 11 Taco Bell restaurants in Sri Lanka, the largest international quick-service restaurant chain.
“India has the potential to be a true jewel in Yum!’s global markets and this announcement represents a significant step in this journey,” said Sumeet Narang, nominated director of Sapphire Foods India and founder of private equity firm Samara Capital.
India has third highest According to the company’s latest financial report, it is noteworthy that Yum!Brand stores are concentrated in the USA and China.
