New Delhi: Two major food service operators in India, Sapphire Foods India Ltd (SFIL) and Devyani International Ltd (DIL), which run popular global brands such as KFC and Pizza Hut, are set to merge. The decision was approved in a board meeting held on Thursday. After the merger, the combined entity will operate more than 3,000 outlets and have an annual turnover of around ₹8,000 crore.
This merger comes at a time when India’s quick service restaurant (QSR) sector is witnessing slower growth and relatively weak demand. By joining forces, the companies aim to improve operational efficiency, expand reach, and strengthen their market position.
What Does It Mean for Customers?
One of the biggest changes for customers will be convenience. After the merger, KFC and Pizza Hut outlets are expected to increasingly operate under the same roof. This means customers may no longer need to visit separate locations for fried chicken and pizza, as multiple brands could be available at a single outlet.
The merger could also lead to better pricing, combo offers, and loyalty programs, as a larger network allows cost savings through shared supply chains, logistics, and marketing. Customers may benefit from faster service, wider menu choices, and improved store formats.
A Stronger Global Footprint
Post-merger, the company’s operations will extend beyond India to markets such as Nigeria, Nepal, Thailand, and Sri Lanka. In addition to KFC and Pizza Hut, the merged entity will hold licenses for several other global brands, including Taco Bell, Costa Coffee, T’Live, New York Fries, and Sanoook Kitchen.
This consolidation will make the new company India’s largest franchisee for Yum! Brands’ food chains, strengthening its negotiating power and ability to expand aggressively.
What Happens to Shares?
As per the merger terms, Sapphire Foods shareholders will receive 177 shares of Devyani International for every 100 shares they hold. Of the 25.35% promoter stake in Sapphire Foods, 18.5% will be acquired by a Devyani International group company, while the remaining stake will be exchanged through a share swap.
Timeline for Completion
Yum! Brands, the US-based parent company of KFC and Pizza Hut, has already approved the merger. However, regulatory and statutory approvals are still pending. The entire process is expected to take around 12 to 15 months before the merger becomes fully effective.
The Bigger Picture
Industry experts believe this merger could help both companies navigate the current slowdown in the QSR sector by improving scale, reducing costs, and accelerating expansion. For customers, the biggest gains are likely to be greater convenience, more choices, and potentially better value for money.