Devyani International Limited (DIL) and Sapphire Foods India Limited (SFIL) announced their merger on January 1, 2026, approved by their respective Boards of Directors. This strategic combination aims to create one of India's largest F&B platforms, with over 3,000 stores globally and an annualized turnover of approximately ₹8,000 crore. The merged entity will possess a portfolio of marquee brands including KFC, Pizza Hut, Costa Coffee, Vaango, and Biryani By Kilo, alongside a pan-India distribution network.

The merger is expected to position the combined entity to capitalize on India's growing F&B economy, estimated at over $100 billion, with the QSR segment alone exceeding $25 billion. Upon consummation, the merged entity is projected to surpass $1 billion USD in annual revenues. Key benefits include enhanced scale, stronger brand partnerships, improved bargaining power, and optimized capital allocation for sustained, disciplined growth.

The transaction involves a share swap, with 177 shares of Devyani offered for every 100 shares of Sapphire, primarily due to face value differences. A portion of Sapphire's promoter stake (18.5%) will be transacted bilaterally with RJ Corp between 3 to 15 months post-approval, ensuring RJ Corp maintains significant shareholding in the merged entity as per Yum! requirements. The merger is anticipated to be completed within 9 to 15 months.

Regarding brand strategies, the management indicated plans to restructure and improve profitability for Pizza Hut, aiming for a positive brand contribution margin in the first year and targeting low double digits eventually. For KFC, while marketing and innovation will remain with Yum!, technology and supply chain management will transition to the merged entity. The company is investing in technology, including a common tech stack for all brands, to enhance customer experience and operational efficiency, with a focus on speed and innovation in delivery and store turnaround. Synergies of ₹210 crore to ₹225 crore are anticipated, with a substantial portion expected in the first year post-merger approval.