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Fast food company Yum Brands is selling its most iconic brand: Pizza Hut. <\/p>\n
The deal will see Yum receive a $2.7 billion payout for the pizza chain, which was originally founded in Kansas in 1969. Here\u2019s what you need to know about the sale and how Yum Brands stock (NYSE: YUM) is reacting.<\/p>\n
Today, Yum Brands announced<\/a> that its board of directors has approved the sale of its Pizza Hut restaurant chain. The total pre-tax amount that Yum will receive for the sale is $2.7 billion. <\/p>\n But Pizza Hut isn\u2019t just going to one buyer. Yum is selling the brand to two different entities.<\/p>\n The first is the private equity firm LongRange Capital. Pizza Hut will be the Connecticut-headquartered firm\u2019s first restaurant chain. <\/p>\n Other brands that LongRange Capital currently owns include the gym chain 24 Hour Fitness, the ski resort operator Alpin Unlimited, the burial casket company Batesville, the food manufacturer Bakkavor, and the materials science company US Synthetic.<\/p>\n As part of this deal, LongRange Capital will pay Yum approximately $1.5 billion for its global Pizza Hut operations, excluding those in China. <\/p>\n The second buyer of Pizza Hut is Yum China Holdings, a separate company from Yum Brands, though it was once owned by the U.S.-based giant. In 2016, Yum Brands spun off its Chinese division as a separate company focused solely on the Chinese market.<\/p>\n Yum China Holdings will pay Yum Brands approximately $1.2 billion for its Pizza Hut operations in China.<\/p>\n The fact that Yum Brands has announced a sale of the iconic pizza chain isn\u2019t a total surprise. As CNBC notes<\/a>, Yum was known to have been exploring strategic options for the chain.<\/p>\n Pizza Hut was once the world\u2019s most popular pizza chain. However, it lost that title to Domino\u2019s Pizza almost a decade ago and has since faced increased competition from food delivery platforms, which make it easy for customers to order from smaller, local pizza chains.<\/p>\n Pizza Hut, once known as a sit-down restaurant, has tried to transition to the delivery-based model consumers now prefer, but it has not been able to keep up with the competition. Yum has now decided that it\u2019s best for its shareholders that the brand be sold off to other owners.<\/p>\n \u201cThese transactions enable Yum! to be a more focused company that continues to leverage scale, technology and talent to accelerate our raising the B.A.R. priorities and deliver sustained value for our stakeholders,\u201d Yum CEO Chris Turner said in a statement, referring to its strategic plan<\/a> for growth.<\/p>\n In total, Yum will receive around $2.7 billion in payments from LongRange Capital and Yum China Holdings. Yum Brands says that after taxes, it expects to receive approximately $2.3 billion of net proceeds.<\/p>\n Yum Brands previously said it would close about 250 Pizza Hut locations during the first half of this year, and a recent analysis from Fast Company<\/em> found that it is delivering on that promise.<\/p>\n Investors in Yum Brands so far seems to be reacting positively to the Pizza Hut sale. While the stock is not up significantly, it is currently trading about 2.8% higher to about $159 per share.<\/p>\n That\u2019s the highest level YUM shares have traded at since late April. And with today\u2019s stock price rise, YUM shares are now back in the green for the year, up about 2.2% year-to-date. Over the past 12 months, YUM shares are now up about 7.4%.<\/p>\n As for Yum China Holdings (NYSE: YUMC), it\u2019s a different story. U.S.-listed shares are down about 1.76% to $43.45. Today\u2019s stock price fall means YUMC shares are now down nearly 9% year-to-date. YUMC shares are down less than 1% over the past 12 months.<\/p>\n Yum Brands says it will reveal more details about the sale during its Q2 2026 earnings call, which is expected to take place on July 30. Yum Brands expects both sales to be completed by the end of its third quarter, which is September 30.<\/p>\n Even after Yum offloads Pizza Hut, the company will own several fast food and restaurant brands that are household names, including KFC and Taco Bell.<\/p>\nWhy is Yum Brands selling Pizza Hut?<\/h2>\n
How is YUM stock reacting to the Pizza Hut sale?<\/h2>\n