Yum Brands in Exclusive Talks to Sell Pizza Hut to LongRange Capital
Synopsis
Yum Brands is reportedly in exclusive talks to sell Pizza Hut to private-equity firm LongRange Capital as the pizza chain continues to struggle with declining sales in the United States. The discussions could result in a deal within the next few weeks, although no final agreement has been confirmed. Pizza Hut has reported falling comparable sales for 10 straight quarters amid inflation pressures, changing consumer habits and weaker dining demand. Meanwhile, Yum Brands’ other major chains, including KFC and Taco Bell, continue to post steady sales growth despite broader challenges facing the fast-food industry.
Yum Brands is Talks to Sell For Pizza Hut To LongRange Capital Amid Slumping Sales, Weak Consumer Demand
Key Highlights
- Yum Brands in exclusive negotiations with LongRange Capital over Pizza Hut sale
- A new deal could be struck in a matter of weeks
- Even Pizza Hut U.S. comparable sales fell for 10-straight quarters
- Pizza Hut chains are hit by rising nation
What Happened
Yum brands is in talks to sell Pizza Hut to private equity company LongRange capital. The talks are exclusive and the deal could be announced in the next few weeks but it’s not sure if the agreement will be made, resources familiar to the situation said. The news of the sale of Pizza Hut raised shares of Yum Brands in after hours trading
Why Yum Brands is Considering Sale
Pizza Hut was lagging store sales growth in the US due to multiple economic factors like inflation and weaker consumer confidence, which were still weighing on the demand for dining out. Yum brands have been under pressure to figure out what to do with a food chain whose sales have fallen for 10 quarters. The company announced in November that it was exploring options for Pizza Hut as the chain lagged other Yum brands.
Industry Trend and Market Impact
The fast food sector is also grappling with wider issues as consumers make more health-conscious dining choices and trim unnecessary spending. Though Pizza Hut is suffering, all the other chains at Yum Brands, Taco Bell and KFC, for example, keep posting sales results. High interest in restaurant acquisitions from private-equity firms as companies turn to restructuring amid tough operating environment.
FAQs
- Why are Yum Brands selling Pizza Hit?
Because Pizza Hut has been struggling with sales and vehicle demand in the US.
- Who is LongRange Capital?
LongRange Capital is a cross-industry private-equity investment firm.
- How is profitability of Pizza Hut?
Pizza Hut sales have fallen for 10 quarters directly.
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