Yum China has completed its US$1.2 billion acquisition of the Pizza Hut brand in mainland China from Yum! Brands, giving the restaurant operator full ownership of the business after 36 years of operating it under a licensing agreement.

The deal, announced in June, was completed on August 7 and is expected to improve Pizza Hut’s margins while giving Yum China greater control over the brand’s growth strategy.

The company is stepping up its expansion plans. It expects to open more than 800 net-new Pizza Hut restaurants annually over the next two years, up from its previous target of more than 600.

Pizza Hut had about 4375 restaurants across more than 1100 cities in mainland China when the acquisition was announced. Yum China is targeting more than 6000 locations by 2028 and aims to double the brand’s operating profit by 2029.

CEO Joey Wat said the acquisition gives Yum China greater flexibility to invest in Pizza Hut and respond to changing consumer demand.

“Over the longer term, we expect that brand ownership will give us greater strategic flexibility and allow us to respond more nimbly to market opportunities and consumer needs,” Wat said. 

The transaction forms part of Yum! Brands’ broader divestment of Pizza Hut. The US company has separately agreed to sell the brand’s operations outside mainland China to private equity firm LongRange Capital for about $1.5 billion.