Athira Sethu
Kochi, 2 Jan 2026
The shares of Sapphire Foods and Devyani International are in the spotlight as both have approved the merger that was awaited for a considerable time. The two are the primary franchise operators of Yum Brands in India. The news of the merger came after market hours on Thursday.
According to the approved share-swap deal, the shareholders of Sapphire Foods will get 177 shares of Devyani International for every 100 shares they own. Stock prices of both companies reacted to the merger news on Friday.
The merger shall be operational starting April 1, 2026. After the merger is completed, Sapphire Foods would be wound up without going into liquidation, with all the business activities being transferred to Devyani International.
As a part of this acquisition, Devyani International will also acquire the ownership rights of 19 KFC outlets operating in Hyderabad, presently under the direct management of Yum Brands. But outlets operating in airports and railway stations are to be excluded from this acquisition.
The overriding purpose of this merger is to concentrate the operations of KFC and Pizza Hut beneath one listed corporation. This will enable the merged corporation to enjoy cost savings and the advantages of scale.
On the other hand, Sapphire Foods Mauritius will divest approximately 5.95 crore shares, which is equivalent to 18.5 percent; that will accession to Arctic International. Arctic International is a group company of the Devyani Group; therefore, the promoter-level consolidation will increase prior to the merger.
It is viewed as an optimistic sign for Devyani International. There are expected synergies in revenue and cost, as there are overlapping operations that have been eliminated. There is expected leverage benefit too.
On the basis of the FY25 proforma figures, the combined entity is expected to have 3,002 stores, whereas the previous count was 2,039 for Devyani and 963 for Sapphire. The combined revenue is also expected to reach ₹7,826 crores, whereas the operating EBITDA stands at approximately ₹756 crores. EBITDA margins for the combined entity also remain at 9.7 percent.
After the acquisition, the expected increase in Devyani’s revenue and EBITDA is 58 and 53%, respectively; also, the equity base will increase by 46%.
On Friday, the stock of Sapphire Foods was trading 3.4% down at ₹253.80 and the shares of Devyani International was trading 1.2% up at ₹149.21 at 11.55 AM.
