In a move set to reshape India’s quick-service restaurant (QSR) sector, Sapphire Foods India Limited and Devyani International Limited (DIL) have announced plans to merge, consolidating the country’s franchise operations of Yum! Brands’ KFC and Pizza Hut under one entity, the financial media reported.
The move will also lead to competition with the Indian operators of McDonald’s and Domino’s Pizza chains — Westlife Foodworld and Jubilant Foodworks.
The merger comes as India’s fast-food industry faces slowing same-store sales and shrinking margins, with consumers cutting back amid rising living costs. The deal aims to create a stronger, more efficient platform to accelerate growth and expansion across key markets.
Under the merger terms, Devyani International will issue 177 shares for every 100 shares held in Sapphire Foods. The integration process, expected to take 15 to 18 months, will unite two of Yum!’s largest Indian franchise partners. Ahead of the merger, Arctic International, a group company, will acquire 18.5% of Sapphire’s equity from existing promoters, potentially transferring it later to a financial investor.
The combined entity will focus on three core priorities: expanding KFC’s reach, revitalizing Pizza Hut, and scaling up Devyani’s emerging brands. Yum! Brands has approved the transaction, granting long-term waivers and incentives to support store growth and sustainable operations. As part of the agreement, Devyani will acquire 19 KFC outlets currently run by Yum! India in Hyderabad.
Devyani International Chairman Ravi Jaipuria hailed the merger as a “decisive leap forward,” granting DIL exclusive franchise rights for KFC and Pizza Hut across India while adding Sapphire’s international presence in Sri Lanka. “This consolidation allows us to realize economies of scale, leverage a unified technology platform, and enhance supply-chain efficiency,” Jaipuria said.
Sumeet Narang, founder of Samara Capital and nominee director at Sapphire, called the deal the “culmination of a shared vision” to build a unified, institutionally strong QSR platform. He expressed confidence that the merger would cement India’s status as a “crown jewel” in Yum!’s global portfolio.
Yum! Brands CFO Ranjith Roy said the company “fully supports the merger,” describing India as a high-priority market with vast potential for growth.
Devyani operates over 2,000 restaurants across India and abroad, including brands such as Costa Coffee and Biryani By Kilo, while Sapphire manages over 1,000 KFC, Pizza Hut, and Taco Bell outlets across India and Sri Lanka.
The merger is expected to strengthen the QSR ecosystem, creating a single powerhouse capable of driving long-term expansion, efficiency, and shareholder value in one of Yum!’s most dynamic global markets.
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Naresh Khanna – 10 February 2025
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