KFC and Pizza Hut franchise operations to merge as Sapphire Foods and Devyani International join forces
In a landmark move for India’s quick-service restaurant (QSR) industry, Sapphire Foods India Limited (SFIL) and Devyani International Limited (DIL) have announced their merger. The deal will unite two of Yum! Brands’ largest Indian franchise partners—operators of global fast-food giants KFC and Pizza Hut—under one powerful platform.
Under the terms of the merger, Devyani International will issue 177 shares for every 100 shares held in Sapphire Foods. The integration and synergy realization process is expected to conclude within 15 to 18 months of the merger becoming effective.
Ahead of the merger, Arctic International, a group firm, will purchase roughly 18.5% of Sapphire Foods’ equity from current promoters, with flexibility to transfer this stake later to a financial investor of choice.
This strategic consolidation arrives as India’s fast-food industry faces headwinds from slower discretionary spending, rising operating costs, and margin pressures. The combined entity aims to tackle these challenges by improving economies of scale, strengthening its supply chain, and leveraging technology for operational efficiency.
The merged business will prioritize three growth pillars:
- Expanding KFC’s footprint across India,
- Revitalizing Pizza Hut for sustained long-term growth, and
- Scaling up Devyani’s emerging brand portfolio.
Yum! Brands has formally approved the merger, granting long-term waivers and commercial benefits to support store expansion and brand growth. As part of the approval, Devyani will also acquire 19 KFC outlets in Hyderabad currently operated by Yum! India and pay a one-time merger and licensing fee for expanded territory rights.
Commenting on the development, Ravi Jaipuria, Non-Executive Chairman of Devyani International, said that the combination marks “a significant milestone and a decisive leap forward” for both companies. With this merger, DIL will hold franchise rights for KFC and Pizza Hut across the entire Indian market, as well as expand its international presence in Sri Lanka. Jaipuria added that the move will enable “meaningful economies of scale, a unified tech platform, and stronger supply chain capabilities,” unlocking sustained growth for shareholders and partners alike.
Sumeet Narang, founder of Samara Capital and nominee director at Sapphire Foods, reflected on the journey since Sapphire’s creation in 2015: “This merger brings together a unified franchisee for KFC and Pizza Hut in India—fulfilling our vision to build a scaled, institutionally strong QSR platform.” He highlighted the long-term collaboration between Samara Capital Group and RJ Corp, the parent of Devyani International, as central to this transformation.
Ranjith Roy, CFO at Yum! Brands, noted that India remains a “high-priority market” for the company, with huge untapped potential. He said Yum! fully supports the deal, expecting it to drive accelerated growth, enhance supply chain efficiency, and generate greater value for all stakeholders.
Following the merger, Devyani International will become Yum! Brands’ sole franchise partner in India—a move expected to help both KFC and Pizza Hut expand faster in domestic and international markets.
Currently, Devyani International runs over 2,000 restaurants across India, Nepal, Nigeria, and Thailand, operating brands like KFC, Pizza Hut, Costa Coffee, and Vaango, along with homegrown food formats such as The Food Street. It also owns Sky Gate Hospitality, which manages popular Indian cuisine concepts like Biryani By Kilo and Goila Butter Chicken.
Sapphire Foods, formed in 2015, has been one of the most significant Yum! franchisees, operating over 1,000 outlets across India and Sri Lanka, including KFC, Pizza Hut, and Taco Bell.
With the two companies joining forces, India’s fast-food industry is witnessing the creation of a more robust, unified QSR platform, well-positioned to navigate the evolving dining landscape and pursue sustained expansion in one of the world’s fastest-growing consumer markets.
