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Sapphire Foods India Limited (SFIL) and Devyani International Limited (DIL) have approved a scheme of arrangement for the merger of SFIL with and into DIL. This strategic consolidation aims to create one of the largest quick-service restaurant (QSR) operators in India, combining the operations of both companies under DIL. The merger is structured as a share-swap mechanism, where 177 equity shares of DIL will be issued for every 100 equity shares of SFIL.

Arctic International will acquire approximately 18.5% of SFIL’s paid-up equity share capital from existing SFIL promoters, with an option to assign this stake to a mutually agreed financial investor. The merged entity will focus on accelerated expansion of KFC, strengthening Pizza Hut, and scaling DIL’s emerging brands portfolio.

Yum! Brands has approved the consolidation and agreed to key commercial terms, including enhancements to certain waivers for Pizza Hut and KFC brands to support long-term growth and store expansion. DIL will also acquire 19 KFC restaurants currently operated by Yum! India in Hyderabad and pay a one-time charge to Yum! India for merger approval and territory license fees.

The merger is expected to create significant synergy benefits, including economies of scale, cost efficiencies through consolidated procurement, and margin expansion. DIL anticipates an overall synergy of ₹210 to ₹225 crore on an annual basis from the second full year of integrated operations. The full integration and realization of synergy benefits are expected within 15 to 18 months from the effective date of the merger. The entire process of obtaining regulatory and statutory approvals, including from stock exchanges, CCI, and NCLT, is estimated to take approximately 12 to 15 months.