Yum! Brands to expand KFC footprint in UK and Ireland with major acquisition from EG Group

Yum! Brands’ KFC Division has made a significant move by entering into a definitive agreement to acquire over 200 KFC restaurants from EG Group, the brand’s largest franchisee in the UK and Ireland. This transaction marks a major step in accelerating KFC’s growth strategy in these key markets, characterized by high average unit volumes and robust margins.

Strategic Growth in the UK and Ireland Chicken Market

The acquisition is seen as a prime opportunity for Yum! Brands to expand its footprint in the large and growing UK and Ireland chicken market. The experienced KFC UK management team, which operates 50 high-performing company-owned restaurants, will now focus on enhancing the customer experience and deploying digital strategies to drive market share growth.

KFC’s Track Record of Consistent Growth

KFC UK and Ireland have demonstrated consistent growth, with system sales up 7% and same-store sales up 5% across its 1,040 restaurants. Since 2018, the brand has opened 200 new restaurants, indicating the market’s renewed potential. KFC has announced plans to open an additional 500 restaurants across the market by 2030, further cementing its leadership position.

Integration of EG Group’s KFC Business

Upon completion, EG Group’s KFC business in the UK and Ireland, comprising over half of drive-thru restaurants, and 7,800 team members, will be integrated under KFC UK and Ireland management. This move will solidify KFC’s leadership in the market, allowing for continued growth and market share gains.

Leadership Comments on the Acquisition

Sabir Sami, KFC Division Chief Executive Officer, emphasized the UK and Ireland’s strength as one of KFC’s strongest markets globally. He noted the local management team’s talent in making KFC a nearly £2 billion business in the UK. Meg Farren, Managing Director of KFC UK and Ireland, highlighted EG Group’s role in KFC’s expansion and the opportunity to capitalize on the growing market for high-quality chicken.

Transaction Terms and Impact

Under the terms of the agreement, Yum! Brands will fund the acquisition from its cash flows. The transaction is expected to be finalized by the end of the first half of 2024 and is anticipated to have an immaterial impact on Yum!’s 2024 financial results. This acquisition aligns with Yum! Brands’ efficient asset-light strategy, maintaining a predominantly franchisee-owned global restaurant base.