Yum Brands has agreed to sell its Pizza Hut business in a pair of transactions totaling approximately $2.7 billion, allowing the company to concentrate on its more profitable brands, KFC and Taco Bell. The deals, announced Tuesday, are expected to close in the third quarter of 2026, pending regulatory approval.

Private equity firm LongRange Capital will acquire Pizza Hut’s operations outside mainland China for $1.5 billion. Meanwhile, Yum China Holdings Inc., a separate company that spun off from Yum Brands in 2016, will buy the mainland China segment of Pizza Hut for about $1.2 billion. Together, these transactions cover nearly 20,000 Pizza Hut locations worldwide, including roughly 6,400 in the United States.

The decision to sell Pizza Hut follows years of underperformance relative to Yum’s other brands. Despite a surge in pizza demand during the COVID-19 pandemic, Pizza Hut struggled to sustain growth amid changing consumer preferences favoring delivery and carryout options, segments where competitors like Domino’s and Papa John’s have gained market share. In 2026 alone, Yum Brands closed approximately 250 underperforming U.S. Pizza Hut restaurants as part of a broader effort to restructure the chain.

Yum Brands Chief Executive Chris Turner characterized the sale as a step toward a more focused corporate strategy. “These transactions enable Yum to be a more focused company,” Turner said, emphasizing that Pizza Hut accounted for less than 10 percent of the company’s total operating profit last year, while KFC and Taco Bell continued to show strong financial performance. In the first quarter of 2026, Yum Brands reported a 10 percent increase in core operating profit excluding Pizza Hut, driven largely by gains in its other major franchises.

The acquisition of Pizza Hut’s Chinese operations by Yum China is expected to be “transformative” and immediately accretive to net income this fiscal year, with the company projecting mid-single-digit net income growth in the following years. China represents Pizza Hut’s second-largest market after the U.S., contributing roughly 19 percent of global sales.

LongRange Capital, founded in 2019 and based in Stamford, Connecticut, is a relatively new private equity firm with diverse holdings, including the gym chain 24 Hour Fitness and a synthetic diamond manufacturer. Bob Berlin, a founder and managing partner of LongRange, expressed optimism about the deal, highlighting Pizza Hut’s strong global brand and loyal customer base. He stated the firm looks forward to collaborating with Pizza Hut’s leadership and franchisees to drive future growth.

The sale underscores a broader trend of consolidation and strategic realignment in the global food and restaurant sectors. In recent months, major deals have included Ferrero’s $3.1 billion purchase of WK Kellogg and McCormick’s $66 billion merger with Unilever’s food division, reflecting mounting pressures on legacy brands to adapt to evolving market dynamics.

Shares of Yum Brands rose by about 2 percent in early trading following the announcement, while Yum China’s shares saw a slight decline on U.S. markets. The transactions are subject to customary regulatory approvals and are anticipated to finalize in the third quarter of 2026.