Shares of KFC and Pizza Hut Indian operator Devyani jump on merger with rival franchisee Sapphire

Shares of KFC and Pizza Hut Indian relation Devyani International roseate arsenic overmuch arsenic 5.3% aft it announced plans to merge with rival franchisee Sapphire Foods India.

Yum! Brands owns fast-food chains similar KFC, Pizza Hut and Taco Bell, and operates them successful India done franchise partners specified arsenic Devyani International, Sapphire Foods India and Burman Hospitality.

The woody would harvester the 2 large franchisee operators for Yum! Brands successful India into a azygous entity, overseeing KFC and Pizza Hut successful the country. While Devyani International did not corroborate the woody size, Reuters reported that the transaction is valued astatine $934 million.

Under the presumption of the merger, Devyani International volition issue 117 shares for each 100 equity shares of Sapphire Foods India, the companies said successful a property release.

Shares of Sapphire Foods India fell arsenic overmuch arsenic 6.4% astatine the open.

The merger is expected to instrumentality effect wrong 12 to 15 months, taxable to regulatory and shareholder approval. The companies said the woody would accelerate KFC's expansion in the country and help revitalize Pizza Hut, which trails marketplace leader Domino's by a wide margin.

"India is simply a high-priority marketplace for us" said Yum! Brands' main fiscal serviceman Ranjith Roy. He added that the state has abundant country for further growth.

The projected merger would thrust accelerated enlargement and make "greater worth for some shareholder bases" done improved proviso concatenation operations, helium said.

Devyani International, the largest franchisee of Yum! Brands successful India, said it expects an yearly "synergies" of 2.1 cardinal rupees to 2.2 cardinal rupees, oregon astir $23 cardinal to $25 million, starting from the 2nd afloat twelvemonth aft the merger is completed.

Devyani operates much than 2,000 quick-service edifice outlets crossed much than 280 cities successful India, Nigeria, Nepal, and Thailand. Meanwhile, Sapphire operates 529 KFC and 338 Pizza Hut restaurants successful India, on with 119 Pizza Hut and 11 Taco Bell restaurants successful Sri Lanka, wherever it the the largest planetary quick-service edifice chain.

"India has the imaginable to go a existent crown jewel wrong Yum!'s planetary markets, and this announcement represents a important measurement successful that journey," said Sumeet Narang, nominee manager astatine Sapphire Foods India and Founder of backstage equity steadfast Samara Capital.

India has the third-highest attraction of Yum!Brand stores aft the U.S. and China, according to the company's astir caller fiscal report.