YUMC
Live News • Jun 18
Yum China Stock in Focus as $1.2 Billion Pizza Hut Deal Targets Major Growth Yum China will acquire Pizza Hut’s Mainland China operations from Yum! Brands for approximately US$1.2b in cash as part of a broader US$2.7b sale of the global Pizza Hut business.
The deal is expected to close in the third quarter of 2026 and will remove royalty payments from Yum China to Yum! Brands on Pizza Hut’s Mainland China operations.
Yum China plans to grow Pizza Hut’s Mainland China store count to more than 6,000 by 2028 and aims to double operating profit from the business by 2029, with EPS accretion anticipated from 2027.
Owning the Pizza Hut brand outright in Mainland China gives Yum China more control over economics, branding and expansion decisions. This could materially change how the Pizza Hut segment contributes to group results over time.
Investors may want to focus on how Yum China manages integration and capital spending for new stores, as well as any execution risks tied to its profit and expansion targets for Pizza Hut in China. Announcement • Jun 17
Yum China Holdings, Inc. (NYSE:YUMC) entered into definitive agreement to acquire Shanghai Pizza Hut Co., Ltd. from Yum! Brands, Inc. (NYSE:YUM) for $1.2 billion. Yum China Holdings, Inc. (NYSE:YUMC) entered into definitive agreement to acquire Shanghai Pizza Hut Co., Ltd. from Yum! Brands, Inc. (NYSE:YUM) for $1.2 billion on June 16, 2026. The consideration will be paid in cash and is subject to certain purchase price adjustments. In a separate agreement, LongRange Capital, L.P. entered into definitive agreement to acquire Pizza Hut, excluding Mainland China from Yum! Brands, Inc. for $1.6 billion. The transaction will be financed through a combination of cash and debt financing. Following the close of the transactions, Yum! Brands, Inc. will no longer report on the Pizza Hut division. The Purchase Agreement does not provide for any termination fees.
For the period ended December 31, 2025, Shanghai Pizza Hut Co., Ltd reported a revenue of $2.3 billion and operating profit of $183 million. The transaction consideration represents an implied last-twelve-month (LTM) P/E multiple of 19.5x.
The transaction is subject to customary closing conditions, including receipt of required regulatory approvals. The deal has been unanimously approved by the board of directors of Yum! Brands, Inc. and Yum China Holdings, Inc. The proceeds from sale will be used in accordance with the Yum! Brands, Inc's capital allocation strategy, including investing in the business and returning excess capital to shareholders. The transaction is expected to be immediately accretive to diluted EPS starting in 2026 following closing, and mid-single-digit accretive to diluted EPS in 2027 and 2028. The transaction is expected to close in the third quarter of 2026.
Lazard, Inc. acted as financial advisor to Yum China Holdings, Inc. Sidley Austin LLP acted as legal advisor to Yum China Holdings, Inc. Fangda Partners acted as legal advisor to Yum China Holdings, Inc. Barclays Capital Inc. acted as financial advisor to Yum! Brands, Inc. Goldman Sachs & Co. LLC acted as financial advisor to Yum! Brands, Inc. Weil, Gotshal & Manges LLP acted as legal advisor to Yum! Brands, Inc. Mayer Brown LLP acted as legal advisor to Yum! Brands, Inc.