Sapphire Foods India Limited is now merging with Devyani International. Following this, over 3,000 stores will be integrated in India and abroad. The network of KFC, Pizza Hut, and Taco Bell brands will be strengthened.
Devyani-Sapphire Foods Merger: A significant change is on the horizon for leading fast-food franchise companies in the country. Sapphire Foods India Limited (SFIL), a major franchisee for KFC and Pizza Hut, is set to merge with Devyani International Limited (DIL).
This merger will create a large fast-food network with over 3,000 stores domestically and internationally. This strategic move is considered crucial in bringing the businesses of KFC and Pizza Hut together.
Size and Turnover of the Combined Company
The boards of directors of both companies approved the merger plan in their respective meetings on Thursday. The combined company resulting from the merger will have a turnover of approximately INR 8,000 crore.
The combined company will maintain its presence not only in India but also in international markets such as Nigeria, Nepal, Thailand, and Sri Lanka. This includes licenses for other global Quick-Service Restaurant (QSR) brands like Costa Coffee, Tea Live, New York Fries, and Sanoook Kitchen, in addition to YUM! brands such as KFC, Pizza Hut, and Taco Bell.
This merger will further strengthen YUM! Brands' b QSR network in India and expand the company's presence internationally.
How Many Shares Will Shareholders Receive
Under this merger, 177 shares of Devyani International will be issued for every 100 shares of Sapphire Foods. This will provide shareholders with new shares in proportion to their holdings.
Currently, promoters hold a total stake of 25.35% in Sapphire Foods. Of this, 18.5% will be acquired by Arctic International, a company within the Devyani Group, while the remaining stake will be converted into shares of Devyani.
The merger has also received approval from YUM! Brands based in the United States. This ensures that the company's international partners also support this move.
What are the Benefits for Shareholders from the Merger
Ravi Jaipuria, Non-Executive Chairman of Devyani International, stated that the merger will provide the company with several benefits, including cost savings, an integrated technology platform, and a ber supply chain.
This will not only create long-term value for shareholders but also provide a better experience for customers. The company's operational efficiency will increase, and it will gain a competitive advantage in the market.
Sumit Narang, Nominated Director of Sapphire Foods and Founder of Samara Capital, said that this merger is an important step towards bringing KFC and Pizza Hut together in India. It also reflects the b partnership between Samara Capital and RG Corp.
Support from YUM! Brands
Ranjit Roy, Chief Financial Officer of YUM! Brands, said the company fully supports this merger. He stated that the merger will promote rapid growth in India, a better supply chain, and ber partnerships. This will not only help the company improve operations but also benefit from expansion into new markets and increased sales.
