Devyani (DEVYANI) M&A Announcement summary

Deal rationale and strategic fit

• Merger creates one of India's largest QSR and F&B platforms with over 3,000 stores, INR 8,000 crore turnover, and INR 78,265 million in FY2025 revenue, combining marquee brands and pan-India reach.

• Unified franchisee for KFC and Pizza Hut across India, with pan-India operations, diversified portfolio, and international presence in Sri Lanka.

• Focus on expanding KFC, strengthening Pizza Hut, and growing the non-Yum portfolio, aiming for $1B+ annual revenues.

• Enhanced bargaining power, national penetration, and ability to allocate capital efficiently.

• Ambition to be the preferred long-term home for global QSR brands in India and unlock sustained value for stakeholders.

Financial terms and conditions

• Share swap ratio set at 177 Devyani shares for every 100 Sapphire shares, reflecting face value differences.

• Promoter-to-promoter transaction for 18.5% stake at a floor price of INR 280, with an option to assign to a financial investor, to be closed within 3-15 months.

• One-time payment/charge to Yum! India for merger approval and additional territory licenses, to be capitalized.

• No exit fee if regulatory approvals are not obtained.

• SFIL promoters currently own 25.35% of SFIL; balance shares to be swapped for DIL shares.

Synergies and expected cost savings

• Net annual synergies estimated at INR 210–225 crore, with full realization within two years post-merger.

• Synergies include G&A savings, procurement negotiations, unified tech investments, and cohesive brand campaigns.

• 60%+ of synergies expected in the first year, with full realization by year two.

• Margin expansion expected via productivity gains, overhead optimization, and scale benefits.

• Gross synergies will be less than 1.5x net synergies due to similar asset footprints and processes.