Devyani Intl & Sapphire Foods merge to create India's largest QSR operator. Deal: 177 shares for 100. Aims for synergy, scale amid losses. Details on structure, owners, timeline.
India's KFC, Pizza Hut Giants Devyani and Sapphire to Merge (Image: File)
MUMBAI, January 1, 2026 — KFC and Pizza Hut operator Sapphire Foods India Limited is set to merge into Devyani International Limited, the companies announced Thursday. The consolidation aims to create India's largest quick-service restaurant (QSR) operator as franchisees face margin pressures and consumers cut back on spending.
The all-stock deal will see Devyani issue 177 shares for every 100 shares of Sapphire. The combined entity, which runs over 3,000 outlets for Yum! Brands in India and overseas, expects annual synergies of Rs 210 crore to Rs 225 crore from the second full year post-merger.
The merger consolidates ownership under the RJ Corp Group led by Ravi Jaipuria. As part of the transaction, group company Arctic International will acquire about 18.5% of Sapphire Foods’ equity from existing promoters. Post-merger, the Jaipuria family's promoter stake in the combined Devyani International is expected to decrease from approximately 61.37% to 47.83%.
The boards of both companies have approved a scheme where Sapphire Foods will be amalgamated into Devyani International. The appointed date for the merger is set for April 1, 2026. The share swap ratio grants Sapphire shareholders 177 Devyani shares for every 100 they own. The merger is pending extensive regulatory approvals expected to take 12 to 15 months.
The merger comes as both companies report financial strain. In the September quarter:
The businesses pointed to declining same-store sales, rising expenses, and a decline in eating out. Scale, operational efficiency, and a single supply chain are the goals of the merger.
The combined company will hold exclusive franchise rights for KFC and Pizza Hut across all of India, creating a giant to compete with operators of McDonald's and Domino's. “The consolidation marks a significant milestone and a decisive leap forward in our growth journey," said Ravi Jaipuria, Non-Executive Chairman of Devyani International.
The merger positions the entity for what the company filing calls "the next phase of accelerated growth, scale, and profitability." It enhances Devyani's international operations with Sapphire's significant presence in Sri Lanka. The combined chain of more than 3,000 locations will use a wider network to counteract the present economic challenges.
A: Devyani International will issue 177 of its shares for every 100 shares of Sapphire Foods held by a shareholder.
A: The appointed date is April 1, 2026, but the merger is subject to approvals and is expected to take 12 to 15 months to complete.
A: The merger requires approvals from stock exchanges, the Competition Commission of India (CCI), the National Company Law Tribunal (NCLT), and shareholders of both companies.
A: The RJ Corp Group led by Ravi Jaipuria will be the controlling promoter, with an expected stake of 47.83% post-merger.
