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Devyani International share price gained as much as 8% on Friday, January 2; meanwhile, Sapphire Foods share price fell by more than 1%, following the long-awaited announcement of the merger of Yum Brands’ India franchisees.

At 9:20 am, Devyani International shares touched an intraday high of ₹157.37. Meanwhile, at 9:40 am, Sapphire Foods shares hit intraday low of ₹252.90 apiece on Friday.

In an exchange filing, the company announced that the board has approved the merger of Devyani International and Sapphire Foods, marking a strategic consolidation of the two companies.

The company further informed that the proposed merger is subject to receipt of all the customary regulatory & statutory approvals, including approvals from the stock exchanges, the Competition Commission of India, the National Company Law Tribunal, and the shareholders and creditors of both the companies.

The approval process is anticipated to take around 12 to 15 months, after which the merger will come into effect.

“Upon completion, the transaction will result in DIL becoming one of the largest quick-service restaurant (QSR) operators in India by combining the operations of both companies, positioning the merged entity for the next phase of accelerated growth, scale, and profitability,” the company said in the filing.

It further said that the merger of the two companies will happen through a share swap mechanism. As per the approved swap ratio, Sapphire Foods shareholders will get 177 shares of Devyani International for every 100 shares they own. Based on current market prices—around ₹147 for Devyani and ₹261 for Sapphire—the deal appears to be valued broadly in line with prevailing market levels.

Under the amalgamation, Devyani International will also take over 19 KFC outlets in Hyderabad that are presently run by Yum Brands.

Following the merger, Sapphire Foods will be dissolved without undergoing liquidation, with all its operations absorbed into Devyani International.

The consolidation is intended to house KFC and Pizza Hut businesses under one listed entity, unlocking operational synergies and scale advantages. Captive outlets located at airports and railway stations, however, are excluded from the merger.

“The consolidation of Devyani International Limited and Sapphire Foods India Limited marks a significant milestone and a decisive leap forward in our growth journey, resulting in DIL holding franchise rights across the entire Indian market for KFC and Pizza Hut brands. The merger also adds a strong international presence in Sri Lanka, which complements our existing overseas operations," said Ravi Jaipuria, Non-Executive Chairman of Devyani International Limited.

Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.

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