Pizza Hut to be sold for $2.7 billion after years of declining sales and store closures

Photo from December 15, 2016 of a Pizza Hut restaurant, in New Orleans, USA.
AP Photo/Gerald Herbert
The controlling company Yum Brands announced this Tuesday (16) the sale of the pizza chain Pizza Hut for US$ 2.7 billion.
Investment manager LongRange Capital will buy the chain's operations outside of China, for around US$ 1.5 billion, while Yum China Holdings will take over the business in the Asian country for approximately US$ 1.2 billion.
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Pizza Hut has been facing difficulties for years. In February, Yum Brands reported that it was considering selling the chain and closing 250 restaurants in the United States, amid increased competition and stores considered outdated.
The chain was founded in 1958, in the city of Wichita, in the state of Kansas. PepsiCo purchased the chain in 1977, but spun off its restaurant division - which became Yum Brands - in 1997.
"Under the management of LongRange and Yum China, Pizza Hut will be well positioned for growth in the future, with owners who have extensive experience in the restaurant industry," Yum Brands CEO Chris Turner said in a statement.
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Yum Brands, which also owns the chains KFC and Taco Bell began a strategic review in November to evaluate alternatives to Pizza Hut after the chain reported falling sales at comparable stores.
"Pizza Hut has long been the weakest link in Yum's portfolio," said Neil Saunders, managing director of consultancy GlobalData, in a statement. Yum is simply not willing to take over."
According to Saunders, the sale will allow Yum Brands to focus its efforts on brands with stronger sales performance.
Headquartered in Louisville, Kentucky, Yum Brands expects to complete both transactions in the third quarter of this year. The company's shares registered a slight drop before the market opened.

Source: G1