Devyani-Sapphire Merger To Create India's Largest F&B Firm, Turnover Pegged At Rs 8,000 Crore

The merger between Devyani International Ltd and Sapphire Foods will create India's largest food and beverage (F&B) company. The merger entity will have a turnover of around Rs 8,000 crore. After the merger, the entity will likely cross a billion dollar in turnover, sources told NDTV Profit.

According to Devyani International's management, this merger gives the capability to deploy capital in the ''best way possible''. The quick service restaurant (QSR) operator said it has partnered with a global technology vendor for the implementation for specific technological interventions.

Devyani International Ltd said it will hire more people to fill gaps in the marketing teams and technology. For the given merger deal, the entire transaction is going to be share swap with no cash transaction involved.

The management added that the turnaround in SSSG will be the focus way forward. The technology for the entire merged entity will be common but for KFC, it will be transferred. ''A faster delivery and product innovation will be the key focus for the merged entity,'' added Devyani Int's management.

''We'll realise 60% of synergy in the first year of implementation of merger and remaining in second year,'' said Devyani Int. The merger deal will consolidate India's fast-expanding QSR sector. Bringing Pizza Hut, Yum! Brands, and KFC under one roof, the merger will become 2026's first M&A deal.

Sapphire shareholders will receive 177 Devyani shares for every 100 shares held, as per the approved share swap ratio. A secondary sale of 18.5% stake in Sapphire Foods to Devyani's promoter entity, Arctic International, was also approved as part of the deal, which will be conducted before the merger.

The merger will achieve potential synergies of approximately 2.5% at the Ebitda level, translating into benefits worth Rs 210–225 crore. While the merger could take up to 12-15 months to complete, retail investors must note that the merger will hence be done through a share-swap ratio of 177:100.

To be clear, if one currently holds fully paid Sapphire Foods shares, they will automatically receive shares of Devyani International Ltd. based on the approved ratio. The existing Sapphire Foods shares will be extinguished, and the company will eventually be delisted from the stock exchanges.

The entity will take up a slew of measures including accelerated expansion of KFC, strengthening Pizza Hut for long-term sustainable growth. As part of KFC's expansion, Devyani Int will acquire 19 KFC restaurants currently operated by Yum! India in Hyderabad and pay a one-time charge to Yum! India towards merger approval and the licence fee for the additional territory.