Pizza Hut, excluding Mainland China ("Pizza Hut Ex-China"), will be acquired by LongRange Capital ("LongRange"), a private equity firm with a customer-centric and operationally oriented approach, and Pizza Hut in Mainland China ("Pizza Hut China") will be acquired by Yum China Holdings, Inc. (NYSE:YUMC, HKEX: 9987))) ("Yum China").

Following a comprehensive review of strategic options for Pizza Hut that commenced in November 2025, Yum!'s leadership team and Board of Directors determined the sale provides the strongest path to maximize shareholder value while providing Pizza Hut an ownership structure tailored to its distinct markets, competitive strengths and long-term priorities under leadership with significant relevant QSR experience.

"These transactions enable Yum! to be a more focused company that continues to leverage scale, technology and talent to accelerate our raising the B.A.R. priorities and deliver sustained value for our stakeholders," said Chris Turner, Chief Executive Officer, Yum! Brands. "Under LongRange and Yum China, Pizza Hut will be well positioned for future growth with ownership that brings deep expertise in the restaurant industry. Pizza Hut is one of the most iconic restaurant brands in the world, and we are proud of the important role it has played in Yum!'s history. Pizza Hut was built by the passion and dedication of our team members, employees and franchisees, and we're excited for the next chapter."

Yum! Brands and Yum China remain fully committed to a strong partnership that unlocks growth in their joint businesses going forward. The companies have agreed to certain financial incentives that will generate value for both companies' shareholders should KFC China's future system sales growth rates accelerate. In addition, the companies will work together to further advance long-term growth plans for Taco Bell in Mainland China.

Transaction Details

Under the terms of the agreement with LongRange, Yum! will sell Pizza Hut Ex-China to LongRange for approximately $1.5 billion. Additionally, Yum! has the opportunity to receive an earn-out of $75 million by 2030.

Under the terms of the agreement with Yum China, Yum! will sell Pizza Hut China to Yum China for approximately $1.2 billion.

Across the two transactions, Yum! expects to receive approximately $2.3 billion of net proceeds after taxes, closing adjustments and transaction-contingent fees, excluding the earn-out. Yum! additionally expects to incur one-time expenses of approximately $85 million during the remainder of 2026 to effectuate the separation.

Yum! will continue to provide Byte by Yum!, its proprietary technology platform, to Pizza Hut Ex-China. Additionally, Yum! will provide certain corporate services to Pizza Hut Ex-China, under a transition services agreement to support an orderly separation. Yum! expects the fees received for these services in 2026 to offset Yum! corporate G&A expenses historically allocated to Pizza Hut.

Management will provide additional information regarding the financial impact of the transaction, including any related updates to its 2026 financial outlook, during Yum!'s second-quarter earnings conference call scheduled for July 30, 2026.

The transactions have been unanimously approved by Yum!'s Board of Directors. Yum! expects both transactions to close in the third quarter of 2026, subject to customary closing conditions, including receipt of required regulatory approvals. Following the close of the transactions, Yum! will no longer report on the Pizza Hut division.

Barclays and Goldman Sachs are serving as financial advisers to Yum!. Weil, Gotshal & Manges LLP and Mayer Brown LLP are serving as legal advisers to Yum!.

Share Repurchase Program

The net after-tax proceeds will be used in accordance with the Company's capital allocation strategy, including investing in the business and returning excess capital to shareholders. Concurrent with approval of the transactions, Yum!'s Board of Directors approved an incremental $4 billion authorization for the repurchase of common stock.