Yum! Brands (YUM) stock is virtually unchanged despite news that the fast food giant is set to sell its Pizza Hut operations in two transactions worth $2.7 billion. According to the announcement, Pizza Hut operations outside mainland China will be sold to LongRange Capital for about $1.5 billion, while Pizza Hut operations in China will be bought out by Yum China for $1.2 billion.
This deal can be viewed as one of the most important strategic moves of Yum! Brands, and it does not indicate the weakening of the company. On the contrary, the company is looking to simplify its business structure and concentrate efforts on developing its strongest-performing brands. Yum! Brands will generate about $2.3 billion in net proceeds from the deal.
