Devyani International Limited (DIL) will merge with Sapphire Foods India Limited (SFIL) to consolidate their quick-service restaurant (QSR) operations. The merger will consolidate KFC and Pizza Hut businesses in India, except in captive markets such as airports and railway stations. The share exchange ratio is set at 177 DIL shares for every 100 SFIL shares. The merger awaits final regulatory approvals.
Merger Approval and Business Consolidation
The Board of Directors of Devyani International Limited (DIL) has approved a merger with Sapphire Foods India Limited (SFIL). The deal aims to consolidate the Quick Service Restaurant (QSR) businesses of both companies. The decision was made during a board meeting held on January 1, 2026.
Strategic Rationale
The amalgamation of SFIL into DIL is expected to yield several strategic benefits:
- Economies of Scale: The merger will consolidate QSR businesses under KFC and Pizza Hut, leading to economies of scale.
- Unified Strategy: A unified consumer strategy will enable growth and reduced overheads.
- Operational Efficiencies: Harmonization of sales and service channels will enhance efficiencies.
- Resource Pooling: Combining financial, managerial, and technical resources will strengthen the competitive position of the combined entity.
Shareholding and Equity Details
Upon the scheme becoming effective, Devyani International will issue 177 fully paid-up equity shares for every 100 equity shares of Sapphire Foods. The shareholding pattern will change, with the promoter and promoter group holding approximately 47.83% post-merger, and public shareholders holding 52.17%. Persons belonging to the Promoter Group also intend to be reclassified in the ‘Public’ category in the Transferee Company.
Acquisition of KFC Stores
Devyani International and Sapphire Foods have also entered into a binding term sheet to acquire 19 KFC stores owned by Yum India. A lump sum payment of INR 90 crore will be made for this acquisition. An additional payment of INR 320 crore will be made for proceeding with the merger and towards additional territory rights.
Shifting of Registered Office
The board also approved shifting the registered office of the company from the National Capital Territory of Delhi to the State of Haryana, subject to shareholder approval.
Source: BSE
