Yum Brands announced on Tuesday that it has sold Pizza Hut in two separate transactions totaling $2.7 billion, marking a significant shift for the long-established pizza chain amid ongoing operational challenges. The Louisville, Kentucky-based company sold the U.S. operations of Pizza Hut to LongRange Capital, a private equity firm based in Stamford, Connecticut, for $1.5 billion. Separately, Yum China Holdings Inc. acquired the mainland China business for $1.2 billion.

The deal encompasses nearly 20,000 Pizza Hut locations globally, including approximately 6,400 restaurants in the United States. The transactions are expected to finalize in the third quarter of this year.

Yum Brands had earlier signaled its intent to explore strategic options for Pizza Hut in November after reporting a decline in sales the previous year. In February, the company disclosed plans to close 250 franchise locations across the U.S. as part of efforts to address the chain's operating difficulties.

“Under LongRange and Yum China, Pizza Hut will be well-positioned for future growth with ownership that brings deep expertise in the restaurant industry,” said Chris Turner, Yum Brands CEO, in a statement issued Tuesday. Turner also acknowledged Pizza Hut’s status as one of the world’s most iconic dining brands and reflected on its integral role in Yum’s history.

Founded in 1958 in Wichita, Kansas, Pizza Hut expanded rapidly before being acquired by PepsiCo in 1977. Two decades later, PepsiCo spun off Pizza Hut along with KFC and Taco Bell into the newly created Yum Brands. Notably, Taco Bell originated in Downey, California, in 1962 and remains part of Yum’s portfolio.

The sale marks a strategic realignment for Yum Brands as it focuses on other areas of its business while transitioning Pizza Hut into new ownerships tailored to the brand’s specific markets. Both LongRange and Yum China bring operational experience that Yum Brands believes will support Pizza Hut’s future competitiveness and growth worldwide.