EG Group said it has entered into a definitive agreement to sell all its 218 KFC franchise restaurants in the UK and Ireland to Yum! Brands’ KFC Division.
EG Group – the largest KFC franchisee in the UK and Ireland – said the transaction is an additional step in its deleveraging strategy and continued progress towards putting in place a sustainable capital structure. The sale is expected to complete in the first half of 2024, with proceeds to be used to repay debt.
“We are proud to have been a strategic partner of KFC in the UK and Ireland, playing an important role in helping the brand expand its footprint,” Zuber Issa and Mohsin Issa, co-founders and co-CEOs of EG Group, said.
“Now is the right time to hand the baton to the KFC leadership team to continue to grow the brand in the UK and Ireland. This is the latest transaction in our significant deleveraging this year to put in place a sustainable capital structure for the group. We would like to thank all the colleagues who have helped deliver such exceptional brand standards and customer service over recent years, including during the Covid-19 period.”
In October, EG Group has completed the sale of the majority of its UK&I fuel, foodservice, grocery and merchandise business to Asda for a cash consideration of £2 billion.
The group continues to operate in the US, Australia, Germany, France, Italy, the Netherlands, Luxembourg, Belgium and the UK, including its wholly-owned bakery business, Cooplands, as well as franchise businesses with the Starbucks, Subway, Greggs, Sbarro, Chaiiwala and Cinnabon brands.
“We continue to make good progress against our key strategic priorities – delivering a world-class grocery and merchandise, foodservice and fuel proposition across nine markets globally,” Issas added.
Yum! Brands said the transaction represents a significant opportunity to accelerate KFC’s growth strategy in the large and growing UK and Ireland chicken market, with high average unit volumes and robust margins.
Once completed, all of EG’s KFC UK and Ireland business – over half of which is made up of drive-thrus – and 7,800 team members will come under KFC UK and Ireland management.
“EG has played an important role in helping KFC expand its footprint across the UK and Ireland, and the KFC brand has been a big part of EG’s own growth in recent decades,” Meg Farren, managing director of KFC UK and Ireland, said.
“With the market for high-quality, great-tasting chicken growing all the time, we see a big opportunity to capitalise on our leadership position and to unlock new value for all our stakeholders in the UK and Ireland, especially our customers and the communities we’re so proud to serve. On behalf of all of us on the management team, I want to welcome EG’s KFC restaurant team members even closer into the KFC family.”