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​KFC's Strategic Acquisition: 218 EG Group Restaurants

​KFC's Strategic Acquisition: 218 EG Group Restaurants

Posted by Emily on 6th Dec 2023

KFC, a subsidiary of Yum! Brands, is set to significantly expand its UK and Ireland operations by acquiring 218 restaurants from its largest franchisee, EG Group. This strategic move is poised to propel KFC towards a £2 billion valuation in the region.

KFC - Coventry Road, Sheldon (34548690956) Elliott Brown from Birmingham, United Kingdom, CC BY-SA 2.0, via Wikimedia Commons

This acquisition encompasses all 7,800 team members of the EG Group's KFC portfolio, notably including most drive-through restaurants. KFC's current UK and Ireland footprint includes 1,040 sites, and this deal is a key step in its aggressive expansion plan. Since 2018, KFC has launched 200 new locations and aims to open an additional 500 by 2030.

Sabir Sami, CEO of KFC's division, emphasises the brand's strong market position: "The KFC business is a powerhouse for Yum! globally, and the UK and Ireland are among our strongest markets." This acquisition aligns with KFC's growth strategy in the lucrative UK and Ireland chicken market, known for high unit volumes and robust margins.

EG Group, under the ownership of the Issa brothers, who also acquired Asda in 2021, views this sale as a strategic move to reduce debt. This follows their October acquisition of significant parts of EG Group's UK business, including the Leon restaurant brand and over 400 Greggs, Burger King, and Subway franchises.

The transaction, expected to finalise in the first half of 2024, will bring all of EG Group's KFC businesses in the UK and Ireland under direct KFC management. This aligns with Yum! Brands' asset-light strategy is predominantly focused on franchisee-owned restaurants.

Meg Farren, Managing Director of KFC UK and Ireland, acknowledges EG Group's role in KFC's expansion and foresees further growth opportunities in the market. Zuber Issa and Mohsin Issa, co-founders of EG Group, expressed pride in their partnership with KFC and optimism for the brand's future growth under KFC's leadership.

This acquisition is a testament to KFC's ongoing commitment to delivering high-quality chicken, prepared fresh and by hand, maintaining the standards set by Colonel Harland Sanders over 80 years ago. With over 29,000 restaurants globally, KFC continues to innovate while honouring its heritage.

We invite readers to share their thoughts and comments below on this significant development in the fast-food industry.