Yum! Brands Inc (NYSE:YUM) announced on Tuesday that it has entered into definitive agreements to sell Pizza Hut for a combined value of approximately $2.7 billion, as the restaurant operator sharpens its focus on its remaining brands, which include KFC and Taco Bell, and capital allocation priorities.
Under the agreements, private equity firm LongRange Capital will acquire Pizza Hut operations outside Mainland China for about $1.5 billion, while Yum China Holdings (NYSE: YUMC) will purchase Pizza Hut China for approximately $1.2 billion.
The transactions are subject to customary closing conditions and regulatory approvals and are expected to close in the third quarter of 2026.
The sale follows a strategic review of Pizza Hut that began in November 2025. Yum! said its leadership team and board concluded that separate ownership structures would provide the best path for the pizza chain's future growth while maximizing value for shareholders.
“These 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,” Yum! CEO Chris Turner said in a statement.
Turner added that Pizza Hut would be positioned for future growth under owners with restaurant industry expertise and described the brand as one of the most iconic restaurant chains in the world.
As part of the transaction with LongRange, Yum! may receive an additional earn-out payment of up to $75 million by 2030. Excluding that potential payment, the company expects to receive approximately $2.3 billion in net proceeds after taxes, closing adjustments and transaction-related fees.
Yum! said it expects to incur about $85 million in one-time expenses during the remainder of 2026 related to separating the business.
The company will continue providing its proprietary Byte by Yum! technology platform to Pizza Hut Ex-China and will also offer certain corporate services under a transition agreement to support the separation process.
Yum! and Yum China said they will maintain their partnership following the transaction. The companies agreed to financial incentives tied to future growth in KFC China's system sales and will continue collaborating on long-term expansion plans for Taco Bell in Mainland China.
Alongside the sale announcement, Yum!'s board authorized an additional $4 billion share repurchase program. The company said the net proceeds from the transactions will be used in line with its capital allocation strategy, including investments in the business and returning excess capital to shareholders.
Yum! plans to provide additional details regarding the financial impact of the sale and any updates to its 2026 outlook during its second-quarter earnings conference call on July 30.
Shares of Yum! traded up 2.5% on the news.