Future KFC Russia owners expect to close deal by end-2022
IZHEVSK. Nov 16 (Interfax) - The deal to acquire KFC's Russian assets should be closed by the end of 2022, said Konstantin Kotov, co-owner of Smart Service LLC.
"We expect the deal to close before the end of the year, after which a rebranding process awaits us," Kotov said at the "Made in Udmurtia" forum on Wednesday.
"Literally two days ago, we submitted [paperwork] to the antimonopoly service for approval, and in about two days we have to submit documents to the government commission for the approval of such transactions," he said. "This is a very large deal with 40,000 employees behind it," he said.
The Federal Anti-monopoly Service received a request from Smart Service LLC on Monday for clearance to buy the Russian business of Yum! Restaurants, which operates the KFC chain.
U.S. fast food company Yum! Brands said at the end of October that it had entered into a sale and purchase agreement to transfer ownership of its Russian KFC restaurants, operating system and master franchise rights, including the network of KFC franchised restaurants, to Smart Service Ltd., which is operated by one of the company's existing KFC franchisees in Russia, Konstantin Kotov and Andrei Oskolkov.
Yum! Brands will end its corporate presence in Russia following the transaction.
Kommersant reported that the assets being sold are worth an estimated 1.3 billion rubles. The new owner will have to rebrand all 1,000 KFC restaurants in Russia to the Rostic's brand, which Yum Restaurants Russia LLC registered on September 1, 2022.
Smart Service Ltd. is registered in Izhevsk, data from the SPARK-Interfax system showed.
There were about 1,000 KFC fast food restaurants and 50 Pizza Hut restaurants operating in Russia in early 2022. Yum! Brands subsidiary Yum Restaurants Russia LLC operated about 70 KFC restaurants and the rest were franchises.
Yum! Brands suspended the operation of its own KFC restaurants in Russia and investment in the Russian market in March. In May, the company transferred the Pizza Hut franchise to a local operator, who began rebranding the restaurants.
Yum Restaurants Russia increased its net profit by 45% to 1.9 billion rubles in 2021 as revenue grew by 31.5% to 18.29 billion rubles.