The Competition Commission of India (CCI) has approved the proposed merger of Sapphire Foods India Limited with Devyani International Limited, paving the way for the consolidation of two of India’s leading quick-service restaurant (QSR) operators. The merger is expected to bring their KFC and Pizza Hut franchise operations under a single corporate entity, creating a larger business platform with expanded operational capabilities.
The approval, announced on Friday, also covers certain related transactions. The CCI stated that a detailed order would be issued separately.
Merger to Consolidate KFC and Pizza Hut Operations
The merger will combine the Indian restaurant businesses of both companies, which operate some of the country’s most recognised quick-service restaurant brands.
Devyani International operates KFC and Pizza Hut outlets in India and is also the exclusive franchisee of Costa Coffee, New York Fries and Sanook Kitchen in the country. In addition, the company operates several homegrown food and beverage brands.
Sapphire Foods India is another major restaurant operator in the country, with franchise operations of KFC and Pizza Hut across multiple markets.
The consolidation is expected to create a stronger operating structure, allowing both companies to combine their resources, infrastructure and business capabilities.
Share Swap Arrangement for the Merger
The companies announced the proposed merger on January 1, 2026, through a scheme of arrangement involving a share-swap mechanism.
Under the proposed arrangement, Devyani International will issue 177 equity shares for every 100 shares held in Sapphire Foods India.
The share-swap structure will facilitate the integration of both businesses under Devyani International.
Combined Entity to Operate Over 3,000 Stores Globally
According to the companies’ earlier announcement, the combined entity is expected to operate more than 3,000 stores globally and generate annualised revenue of approximately ₹8,000 crore.
The larger operating platform is expected to deliver several business advantages, including:
- Improved procurement efficiency through combined purchasing capabilities.
- Stronger supply chain management and distribution networks.
- Better utilisation of technology and operational infrastructure.
- Greater marketing capabilities and improved brand positioning.
- Enhanced operational efficiency through economies of scale.
Focus on KFC Growth and Pizza Hut Revival
The merger is also expected to support the future growth strategies of both restaurant brands.
For KFC, the consolidation could provide stronger operational capabilities and support further expansion in the Indian market.
For Pizza Hut, the combined business is expected to create opportunities to improve operational performance and support efforts to revive its business in India amid increasing competition in the quick-service restaurant sector.
Regulatory Approval and Next Steps
Although the Competition Commission of India has approved the proposed merger, the transaction remains subject to other applicable statutory and regulatory approvals before completion.
Once all necessary approvals are secured, the merger will bring the two major QSR operators together under a consolidated business structure.
The development marks a significant step in the Indian restaurant industry, potentially reshaping the operating landscape for KFC and Pizza Hut while creating one of the country’s largest organised quick-service restaurant platforms.
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