The Indian operators of KFC and Pizza Hut have announced they will be merging in a deal worth US$934 million.
The two fast food operators, Sapphire Foods India and Devyani International, made the announcement on Thursday, at a time when they are facing heavy competition from the operators of McDonald's and Dominoes Pizza, higher costs of operation and same store sales slowing.
The merger will set them up as a strong force in the fast food market of the most populous country in the world.
Expected to take 15 to 18 months to fully integrate, the deal is being backed by U.S. Yum! Brands Inc, which owns KFC and Pizza Hut branding respectively.
“This combination will allow us to realise meaningful economies of scale, leverage a unified technology platform, and strengthen our supply-chain,” Ravi Jaipuria, non-executive chairman of Devyani International, said in a statement.
“Together, these advantages will help unlock sustained value creation and long-term growth for all stakeholders.”
