Yum China, the operator of KFC and Pizza Hut in mainland China, will pay US$1.2 billion to acquire ownership of the Pizza Hut business in the market, deepening its separation from US restaurant giant Yum! Brands and gaining full control of the brand in China.

The consideration will be paid entirely in cash, funded through a combination of existing cash reserves and debt financing. Subject to customary closing conditions, the transaction is expected to be completed in the third quarter of 2026.

The deal forms part of Yum! Brands’ broader plan to divest its Pizza Hut operations globally. Private equity firm LongRange Capital will acquire the Pizza Hut business outside mainland China for US$1.5 billion.

Once the transaction closes, Yum China will transition from Pizza Hut’s exclusive licensee in mainland China to the brand’s owner, eliminating the need to pay licensing fees to Yum! Brands.

“Moving from the exclusive licensee to the brand owner of Pizza Hut in Mainland China represents a transformative milestone for us, demonstrating our conviction and long-term commitment to the China market,” Yum China CEO Joey Wat said in a statement on Tuesday.

“We see tremendous opportunities ahead, and we are still only at the early stage of our planned growth trajectory for Pizza Hut China.”