Devyani International, Sapphire Foods to merge, forming single Yum! Brands franchisee in India

Devyani International (DIL) and Sapphire Foods India (SFIL) have approved a scheme of arrangement to merge Sapphire Foods with and into Devyani International, creating a single, unified franchisee for Yum! Brands’ KFC and Pizza Hut businesses in India.

The decision was approved by the boards of both companies at their respective meetings held today. The proposed merger is subject to customary regulatory and statutory approvals, including those from stock exchanges, the Competition Commission of India (CCI), National Company Law Tribunal (NCLT), and shareholders and creditors of both companies. The approval process is expected to take around 12–15 months, after which the merger will become effective.

Under the proposed structure, Sapphire Foods will merge with and into Devyani International through a share-swap mechanism. The approved swap ratio is 177 equity shares of Devyani International for every 100 equity shares of Sapphire Foods.

As part of the transaction, Arctic International, a group company, will acquire approximately 18.5% of Sapphire Foods’ paid-up equity share capital from existing promoters, with an option to assign the stake to a mutually agreed financial investor.

Post-merger, the combined entity will focus on accelerating the expansion of KFC, strengthening and revitalising Pizza Hut for long-term sustainable growth, and scaling up Devyani International’s emerging brands portfolio.

Devyani International will also acquire 19 KFC restaurants currently operated by Yum! India in Hyderabad. In addition, the company will pay a one-time charge to Yum! India towards merger approval and the licence fee for the additional territory.

Ravi Jaipuria, non-executive chairman of Devyani International, said: “The consolidation of Devyani International and Sapphire Foods India 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. The merger also adds a strong international presence in Sri Lanka, which complements our existing overseas operations. This combination will allow us to realise meaningful economies of scale, leverage a unified technology platform, and strengthen our supply-chain capabilities. Together, these advantages will help unlock sustained value creation and long-term growth for our shareholders, customers, employees, and partners. We are grateful to Yum! Brands and its management team for placing their confidence in DIL as the sole, long-term partner for the future growth of KFC and Pizza Hut in India and for their support of this transformative merger.” 

Sumeet Narang, SFML nominee director of SFIL and founder of Samara Capital, said: “Sapphire Foods was conceptualised in 2015 through the consolidation of multiple Yum! Brands franchisees, with a clear vision of building a scaled, institutionally strong QSR platform over time. We are extremely excited about this development, which brings together a single, unified franchisee for KFC and Pizza Hut in India through the merger with Devyani International. This transaction reflects the shared long-term vision and strong partnership between Samara Capital Group and RJ Corp. We are confident that, under RJ Corp’s leadership, these iconic brands will continue to grow from strength to strength in the years ahead. India has the potential to become a true crown jewel within Yum!’s global markets, and this announcement represents a significant step in that journey.” 

Ranjith Roy, Yum! Brands CFO said: “Devyani International and Sapphire Foods India have been outstanding partners to Yum! for many years. India is a high-priority market for us with an abundance of white space for further growth and strong consumer reception for our brands. We are pleased to support this proposed merger to unlock a new phase of accelerated growth in the region and to advance supply chain operations, leading to a stronger, more resilient partner in India and greater value for both shareholder bases. We look forward to our continued partnership.”