Sapphire Foods India Ltd and Devyani International Ltd have received board approvals for a merger that will bring the two companies together under a single entity. The proposed consolidation marks a significant step in India’s quick service restaurant space and will create a unified Yum! Brands franchisee for KFC and Pizza Hut in the country.

Under the approved scheme of arrangement, Sapphire Foods will merge with and into Devyani International through a share-swap structure. The consolidation is expected to strengthen operational scale, streamline brand strategy, and position the merged entity for its next phase of growth and profitability.

In a joint statement, the companies said the merger will result in “a single unified Yum! India Franchisee for KFC and Pizza Hut,” bringing together operations that currently run parallel across multiple markets.

The transaction remains subject to customary regulatory and statutory approvals, including clearances from stock exchanges, the Competition Commission of India, the National Company Law Tribunal, and approvals from shareholders and creditors of both companies. Once these approvals are received, the merger will become effective.

As per the scheme, 177 equity shares of Devyani International will be issued for every 100 equity shares of Sapphire Foods. Additionally, Arctic International, a Devyani group company, will acquire approximately 18.5 percent of Sapphire Foods’ paid-up equity share capital from existing promoters, with an option to assign this stake to a mutually agreed financial investor.

Yum! Brands has approved the proposed consolidation. As part of the transaction, Devyani International will also acquire 19 KFC restaurants currently operated by Yum! India in Hyderabad. The company will pay a one-time charge to Yum! India towards merger approval and license fees for the additional territory.

The merger is expected to deliver meaningful synergies, including the creation of one of the largest QSR platforms in India with an expanded national footprint. The unified structure is also expected to unlock growth through a single brand strategy for both KFC and Pizza Hut. Devyani International expects annual synergy benefits in the range of Rs 210 to 225 crore from the second full year of integrated operations.

Commenting on the development, Ravi Jaipuria, Non-Executive Chairman of Devyani International, said, “The merger also adds a strong international presence in Sri Lanka, which complements our existing overseas operations.” He added, “This combination will allow DIL to realise meaningful economies of scale, leverage a unified technology platform, and strengthen our supply-chain capabilities. Together, these advantages will help unlock sustained value creation and long-term growth for our shareholders, customers, employees, and partners.”

Sumeet Narang, SFML nominee director of Sapphire Foods and Founder of Samara Capital, said, “We are extremely excited about this development, which brings together a single, unified franchisee for KFC and Pizza Hut in India through the merger with Devyani International Limited. This transaction reflects the shared long-term vision and strong partnership between Samara Capital Group and RJ Corp.”

Yum! Brands CFO Ranjith Roy said, “DIL and SFIL have been outstanding partners to Yum! for many years. We are pleased to support this proposed merger to unlock a new phase of accelerated growth in the region and to advance supply chain operations, leading to a stronger, more resilient partner in India.”

Devyani International is the largest franchisee for KFC and Pizza Hut in India and also operates Costa Coffee, Tea Live, New York Fries, Sanook Kitchen, and the South Indian vegetarian QSR brand Vaango. Sapphire Foods operates KFC and Pizza Hut outlets across multiple states in India and Sri Lanka and also runs Taco Bell restaurants in Sri Lanka. Together, the combined platform is expected to significantly strengthen India’s organised QSR landscape.