The merger will consolidate two of Yum! Brands’ largest franchise operators in India, creating a unified platform for KFC and Pizza Hut with more than 3,000 restaurants globally and projected annualised revenue of around Rs 8,000 crore.
The Competition Commission of India (CCI) has approved the proposed merger of Sapphire Foods India Limited with and into Devyani International Limited, marking a major step towards consolidating KFC and Pizza Hut’s franchise operations in India.
The approval, announced on October 30 and confirmed through a government press release on October 31, covers the proposed merger and related transactions. The development will bring the two restaurant operators under a single corporate structure, with Devyani International emerging as the unified franchisee for Yum! Brands’ KFC and Pizza Hut businesses in India.
The companies first announced the proposed merger on January 1, 2026, through a share-swap arrangement. Under the agreed structure, Devyani International will issue 177 equity shares for every 100 shares held in Sapphire Foods. Additionally, Arctic International, a group company of Devyani, will acquire approximately 18.5% of Sapphire Foods’ paid-up equity share capital from its existing promoters, with an option to assign the stake to a mutually agreed financial investor.
The merger also involves changes to the franchise arrangements with Yum! Brands. As part of the agreement, Devyani will acquire 19 KFC restaurants currently operated by Yum! India in Hyderabad and pay a one-time charge towards merger approval and additional territory licence rights. The arrangement also includes enhancements to certain waivers for KFC and Pizza Hut, aimed at supporting store expansion and the long-term growth of both brands.
For Devyani International, the transaction strengthens its position as one of India’s largest quick-service restaurant operators. The company, part of the RJ Corp Group, operates KFC and Pizza Hut restaurants across India and has international KFC operations in Nepal, Nigeria and Thailand. It is also the exclusive franchisee of Costa Coffee, New York Fries and Sanook Kitchen in India, alongside its homegrown brands, including Vaango, The Food Street, Biryani By Kilo and Goila Butter Chicken.
Sapphire Foods, established in 2015, operates KFC and Pizza Hut restaurants across India and has a presence in Sri Lanka, where it operates KFC, Pizza Hut and Taco Bell outlets. Before the merger, the company held franchise rights for KFC in 10 Indian states and Pizza Hut in 11 states. Its network across India and Sri Lanka exceeded 1,000 restaurants, according to the companies’ January announcement.
The combined business is expected to operate more than 3,000 restaurants globally, with annualised revenue of approximately Rs 8,000 crore. Devyani has projected annual synergies of Rs 210 crore to Rs 225 crore from the second full year of operations of the integrated business. These are expected to come from consolidated procurement, supply-chain efficiencies, technology integration, operational improvements and stronger marketing capabilities.
The companies have identified accelerated KFC expansion and the revival of Pizza Hut as key priorities for the combined business. The integration is also expected to strengthen decision-making, product innovation, promotions and supply-chain management across the two restaurant networks.
Commenting on the proposed consolidation in the January announcement, Ravi Jaipuria, Non-Executive Chairman of Devyani International, said: “The consolidation of Devyani International Limited and Sapphire Foods India Limited marks a significant milestone and a decisive leap forward in our growth journey, resulting in DIL holding franchise rights across the entire Indian market for KFC and Pizza Hut brands.”
He added that the combination would help the company realise economies of scale, leverage a unified technology platform and strengthen supply-chain capabilities.
Ranjith Roy, CFO of Yum! Brands, also backed the proposed merger, describing India as a high-priority market with significant room for further growth. He said the company was pleased to support the merger to unlock accelerated growth, advance supply-chain operations and build a stronger franchise partner in India.
While the CCI approval marks a significant regulatory milestone, the merger is not yet complete. The companies must proceed with the remaining applicable statutory and procedural approvals before the consolidation becomes effective. The CCI has indicated that its detailed order will be issued separately.
