Devyani (DEVYANI) M&A Announcement summary

Deal rationale and strategic fit

• Merger creates one of India's largest QSR and F&B platforms with over 3,002 stores and annual turnover of INR 78,265 million, featuring marquee brands and pan-India reach.

• Unified franchise partner for global brands, consolidating KFC and Pizza Hut operations and enabling rapid capital, talent, and technology deployment.

• Adds a strong international presence in Sri Lanka, complementing existing overseas operations.

• Positioned to leverage India's fast-growing, formalizing F&B and QSR market, estimated at $100 billion and $25 billion respectively.

• Aims to build the preferred long-term home for global QSR brands in India, unlocking sustained value creation for stakeholders.

Financial terms and conditions

• Share swap ratio set at 177 shares of DIL for every 100 shares of SFIL, reflecting face value differences.

• Promoter-to-promoter transaction for 18.5% stake at a floor price of INR 280, with an option to assign to a financial investor, to be closed bilaterally within 3-15 months.

• One-time payment of INR 320 crores to Yum! India for merger approval and additional territory licenses.

• SFIL promoters currently own 25.35% of SFIL; balance shares to be swapped for DIL shares.

Synergies and expected cost savings

• Net synergies estimated at INR 210–225 crores annually, realized over two years post-merger; 60%+ in year one, balance in year two.

• Synergies include G&A savings, Yum incentives, procurement negotiations, and unified technology investments.

• Margin expansion expected via productivity gains, overhead optimization, and scale benefits.

• Gross synergies will be less than 1.5x net synergies due to similar asset footprints and complementary systems.

• Estimated synergies of approximately 2.5% at the EBITDA level, with full realization expected within two years post-merger.