Devyani International, Sapphire Foods Approve Merger to Create Unified KFC–Pizza Hut Franchisee
The boards of both companies have approved the merger of Sapphire Foods India Limited and Devyani International Limited. This merger will create a single, unified franchisee for KFC and Pizza Hut in India. A share swap will result in 177 Devyani shares for every 100 Sapphire Foods shares.
Sapphire Foods India Limited and Devyani International Limited, two of the biggest quick service restaurant (QSR) chains in the country, are all set to merge. This acquisition will help form a common franchisee of KFC as well as Pizza Hut in the country.
The merger plan has been approved by the boards of both Devyani International and Sapphire Foods. In the merger proposal, the Sapphire Foods Company will be merged with the Devyani International Company. The purpose of the merger is to unite and strengthen the operations of both companies. As per the merger plan, 177 shares of Devyani International will be exchanged for 100 shares of Sapphire Foods.
This acquisition has not been finalized. It requires approval from the stock exchange, Competition Commission of India, National Company Law Tribunal, shareholders, and creditors. The company estimates the entire process could take 12 to 15 months.
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US-based food giant Yum! Brands (which owns KFC, Pizza Hut, and Taco Bell) has approved the merger.
After the merger is complete, Devyani International will become one of India's largest QSR companies. This will benefit the company by operating at scale, reducing costs, strengthening the supply chain, and increasing profitability. The company says it expects savings of approximately ₹210-225 crore per year from the second full year of the merger.
Devyani International will also acquire 19 KFC restaurants operated by Yum! India in Hyderabad. In return, the company will acquire Yum! India will be paid a one-time fee and a license fee for the additional area. Devyani Chairman Ravi Jaipuria said that this merger will further strengthen the company's presence in Sri Lanka, which is beneficial for its existing international business.
Devyani International is the largest franchisee of KFC and Pizza Hut. Its brands, including Costa Coffee and Vaango, are present in India, Nepal, Nigeria, and Thailand. Sapphire Foods has KFC and Pizza Hut in several states in India, and KFC, Pizza Hut, and Taco Bell in Sri Lanka, totaling over 1,000 restaurants. Yum! Brands CFO Ranjit Roy said that this merger will help accelerate business growth in India, strengthen the supply chain, and deliver better long-term results.
