KFC, Pizza Hut's Indian operators to merge in $934M deal
What's the story
Sapphire Foods India and Devyani International, the companies behind KFC and Pizza Hut in India, have announced a merger worth $934 million (approximately ₹8,400 crore). The move comes as a response to rising costs and slowing growth in India's fast-food market. The merger will create a major player in the industry with over 3,000 outlets across India and abroad.
Transaction specifics
Merger details and expected synergies
As part of the merger, Devyani will issue 177 shares for every 100 shares of Sapphire. The company expects annual synergies between ₹210 crore and ₹225 crore from the second full year of operations of the combined entity. This move is likely to help both companies overcome their individual net losses and improve scalability in India's competitive fast-food market.
Market influence
Merger's impact on India's fast-food market
The merger will make Devyani International one of India's largest quick-service restaurant (QSR) operators. It will bring together the operations of both companies, paving the way for accelerated growth and profitability. The move is expected to give a major boost to India's fast-food industry, especially amid rising costs and slowing growth.
Approval process
Merger subject to regulatory approvals
The merger is subject to regulatory and statutory approvals from stock exchanges, the Competition Commission of India, and the National Company Law Tribunal(s). It also needs clearance from shareholders and creditors of both companies. The entire approval process is likely to take 12-15 months before it becomes effective.
Strategic move
Merger marks significant milestone for Devyani International
Ravi Jaipuria, Non-Executive Chairman of Devyani International Limited, called the merger a major milestone in their growth journey. He said it gives them franchise rights for KFC and Pizza Hut brands across India and strengthens their international presence in Sri Lanka. The move is seen as a strategic step toward further expansion and profitability for both companies in the fast-food industry.