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.
Upon completion, the transaction will result in DIL becoming one of the largest quick-service restaurant (QSR) operators in India by combining the operations of both companies, positioning the merged entity for the next phase of accelerated growth, scale, and profitability.
The full merger of the two entities, along with the realization of the identified synergy benefits, is expected to be completed within 15 to 18 months from the effective date of the merger.
As part of the merger, Sapphire Foods will merge into Devyani International through a share-swap mechanism. Devyani International will issue 177 shares of the company for every 100 shares of Sapphire Foods one owns. This means that a Sapphire Foods shareholder owning 100 shares of the company as on the record date will get 177 shares of Devyani International after the conclusion of the merger.
Arctic International, a group company, is to acquire approximately 18.5% of SFIL’s paid-up equity share capital from the existing SFIL promoters, with an option to assign to a mutually agreed financial investor.
Yum! Brands has granted its approval for the consolidation of Devyani International and Sapphire Foods. Devyani will pay a one-time charge to Yum! India towards merger approval and the license fee for the additional territory. Additionally, Devyani International will acquire 19 KFC restaurants currently operated by Yum! India in Hyderabad.
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. The merger also adds a strong international presence in Sri Lanka, which complements our existing overseas operations. This combination will allow us to realize 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 conceptualized 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 Limited. 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, CFO, Yum! Brands, said, “Devyani International Limited and Sapphire Foods India Limited 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.”
Sapphire Foods India is one of the largest franchisees for Yum! Brands in the Indian subcontinent, primarily operating KFC, Pizza Hut, and Taco Bell outlets across India, Sri Lanka, and the Maldives. In India, the Company holds franchise rights to operate KFC outlets in 10 states and Pizza Hut outlets in 11 states.
Across its India and Sri Lanka operations, SFIL operates over 1,000 restaurants, making it one of the most significant Yum! franchise partners in the region.
Devyani International is one of India’s largest Quick Service Restaurant (QSR) operators, with a network of over 2,000 stores across more than 280 cities in India, Thailand, Nigeria, and Nepal. The Company’s portfolio represents a compelling blend of iconic global brands and successful homegrown concepts.
DIL holds the distinction of being the largest franchisee of Yum! Brands in India and Nepal. In addition, DIL is the sole franchisee in India for several international brands, including Costa Coffee, Tea Live, New York Fries, and Sanook Kitchen.
Complementing its global portfolio, DIL has developed strong indigenous brands such as Vaango, a South Indian vegetarian cuisine concept, and The Food Street, a food court format that brings multiple brands together under one roof to enhance consumer experience. DIL has also strengthened its Indian cuisine offerings through the acquisition of Sky Gate Hospitality, which owns popular brands such as Biryani By Kilo and Goila Butter Chicken.
