Devyani and Sapphire Cook Up India’s Biggest Fast-Food Marriage

The deal that will change how India eats

It was just past 9 a.m. on a humid Mumbai Monday when two envelopes—one navy, one crimson—were slid across a polished teak table. Inside were signatures that would weld together Devyani International, the subcontinent’s largest KFC and Pizza Hut operator, and its long-time rival Sapphire Foods. By sunset, a $934-million handshake had created a quick-service titan with 1,600 kitchens, 70 cities, and the power to decide how a billion chicken wings are fried.

From duopoly to dinner date

For years the brands shadow-boxed in food-courts from Delhi’s Connaught Place to Bengaluru’s Koramangala. Devyani’s red-and-white buckets jostled for elbow-room with Sapphire’s Hut roofs. Customers never noticed the turf war; they only tasted the result—crispier fries, faster deliveries, deeper discounts. Behind the scenes, both companies bled rent, royalties, and rupees in a race for prime real estate. "We were basically bidding against ourselves," quipped a senior Devyani executive, requesting anonymity because the merger is still pending Competition Commission approval.

"Scale is survival," said Sapphire’s CEO in a late-night Zoom call. "Together we can negotiate cheese prices like Walmart does."

The numbers on the tray

• Combined revenue: ₹14,000 crore ($1.7 billion) annually
• Market share of India’s organised QSR space: 28%
• Estimated cost savings: ₹400 crore a year by 2026
• New entity valuation: roughly $2.4 billion

What happens to your favourite outlet?

Don’t rush for farewell selfies. Store overlap is only 12%, so most neighbourhoods will keep both brands. The real change will be invisible: shared cold-rooms, merged supply trucks, and a single tech stack that remembers you like extra-cheese on your paneer tikka pizza. Analysts predict a 7–8% drop in menu prices within 18 months, assuming commodity inflation behaves.

The global recipe behind the merger

Yum! Brands—parent of KFC, Pizza Hut, and Taco Bell—owns minority stakes in both firms and quietly encouraged the truce. With global fast-food growth flattening, India’s 1.4 billion mouths are the last super-sized opportunity. The merged company is expected to launch one new outlet every 36 hours for the next five years, many in tier-3 towns where Domino’s hasn’t yet delivered.

Jobs, franchises, and the small-town dream

Head-office roles will shrink—an estimated 350 positions face the axe—but kitchen and counter jobs could swell by 25,000. More importantly, 1,200 small franchisees who own single stores will suddenly sit at the same bargaining table as large investors. "My rent was hiked 40% last quarter," said Pooja Mehta, who runs two KFCs in Surat. "Now I have a 1,600-store voice."

"We’re not just merging balance sheets; we’re merging cravings," Devyani’s CFO told investors, clutching a takeaway cup as prop.

Regulatory speed bumps ahead

India’s antitrust watchdog has grown teeth, recently blocking a handful of Big-Tech deals. Legal experts say the QSR merger will likely pass but may require divestment of a few stores in pockets such as Pune’s MG Road where the combined share tops 60%. The companies hope to hear the verdict before the festive season kicks off in October.

The taste test

At a Mumbai outlet open only to employees celebrating the announcement, trays arrived stacked with KFC’s new «Masala Krusher» burgers and Pizza Hut’s «Tandoori Paneer» pizza. One bite and the verdict was unanimous: the food hasn’t changed, but the future just got supersized.