KEY TAKEAWAYS: Yum Brands will sell Pizza Hut for $2.7 billion in two deals expected to close in the third quarter of 2026. Yum China will acquire the Mainland China business for $1.2 billion, while LongRange Capital will buy the remaining operations for $1.5 billion. The sale follows declinin g demand and rising costs, with Pizza Hut facing competition and changing consumer eating habits. Yum will focus on KFC and Taco Bell after the divestiture and also announced a $4 billion share buyback.   Yum Brands to sell struggling Pizza Hut chain for $2.7 billion as demand slumps Yum Brands said on Tuesday it would sell its Pizza Hut chain for $2.7 billion, as the fast-food business struggles with stiff competition and cautious consumer spending. Pizza Hut in Mainland China will be acquired by Yum China Holdings for $1.2 billion, while the rest of the business will go to private equity firm LongRange Capital for $1.5 billion. Rising inflation and elevated commodity costs have weighed on U.S. pizza giants already facing sustained demand weakness, as growing adoption of GLP-1 weight-loss drugs encourages consumers to choose healthier foods. “Pizza Hut is playing catch-up on nearly every front that matters in quick-service pizza – from technology and delivery to marketing and innovation,” EMarketer analyst Zak Stambor said, adding that the chain going private could give it the time and flexibility it needs to rebuild and find its footing. Last year, Yum said it was exploring strategic options after several quarters of declining sales at Pizza Hut. Yum entered exclusive talks with LongRange in May. “These transactions enable Yum! to be a more focused company,” Yum Brands CEO Chris Turner said. Pizza Hut was acquired by PepsiCo in 1977 and spun off in 1997 alongside KFC and Taco Bell to form a restaurant company that later took the name Yum Brands in 2002. Yum, which will be left with Taco Bell and KFC, expects the sale to close in the third quarter of 2026, pending regulatory approvals. LOCAL OPERATORS TAKE CHARGE The sale of the China business mirrors a broader trend of U.S. firms handing control to local operators to navigate tougher competition and shifting demand. Earlier this month, General Mills agreed to sell its Haagen-Dazs shops in mainland China to a group led by tea chain Ningji, while Starbucks sold a majority stake in its China operations to Boyu Capital last year. Yum China, a Shanghai-based spin-off of Yum Brands, owns and franchises over 18,000 stores, including about 13,000 KFC outlets, and aims to expand Pizza Hut to more than 6,000 stores by 2028. Yum Brands and Yum China have also agreed to financial incentives that would benefit shareholders if KFC China’s sales growth accelerates. They will also work together to expand Taco Bell in Mainland China. U.S.-listed shares of Yum China were down about 1%, while shares of Yum Brands, which also announced an additional $4 billion share buyback, rose about 2% in early trading.  (Reporting by Neil J Kanatt and Koyena Das in Bengaluru; Editing by Devika Syamnath) ...read more read less