Two of India’s largest KFC and Pizza Hut franchise operators, Devyani International and Sapphire Foods India, have agreed to merge, marking a major consolidation in the country’s quick-service restaurant sector.

The $US933 million deal, also approved by Yum! Brands, will place the operations of the two chains under a single operator in India, expected to be completed within 12 to 15 months, pending regulatory and shareholder approvals.

According to the stock exchange filings, Devyani will hold exclusive franchise rights for the entire Indian market. Under the agreement, it will also take over 19 KFC outlets in Hyderabad, which are currently managed directly by Yum! India.

Yum! Brands’ India operations have been split between the two groups, with Devyani, controlled by Ravi Jaipuria’s RJ Corp, and Samara Capital-backed Sapphire Foods operating in distinct territories.

The companies said the merger is aimed at achieving scale-driven efficiencies amid rising costs, intensifying competition and uneven consumer demand.

“This combination will allow us to realise meaningful economies of scale, leverage a unified
technology platform, and strengthen our supply-chain capabilities,” said Ravi Jaipuria, non-executive chairman of Devyani International.

“Together, these advantages will help unlock sustained value creation and long-term growth for our shareholders, customers, employees, and partners.”

Devyani International is one of India’s largest QSR operators, running more than 2000 outlets across India and international markets, with several other global food and beverage brands, including Costa Coffee, Tea Live, New York Fries, and Sanook Kitchen.

Sapphire Foods India, established in 2015, operates more than 1000 KFC, Pizza Hut and Taco Bell restaurants across India and Sri Lanka through dine-in, takeaway and delivery formats.