In the transaction, KFC acquires all UK and Ireland KFC businesses represented by Skadden-advised EG.
Skadden and Linklaters have been enlisted for KFC’s purchase of over 200 restaurants from EG Group, its largest franchisee in the UK and Ireland.
Skadden is providing counsel to EG, the business based in Blackburn and owned by the billionaire Issa brothers, in this transaction. Earlier this year, Skadden represented the group in the sale of the majority of its UK business to Asda for £2.07bn. Meanwhile, Linklaters is advising KFC.
On Wednesday, Yum Brands, the parent company of KFC, announced that as part of the deal, all of EG’s KFC business in the UK and Ireland, along with 7,800 team members, would transition to KFC management.
The Skadden team handling the transaction for EG was spearheaded in London by George Knighton, co-head of the firm’s UK corporate practice, and corporate associate Patrick Tsitsaros. The team also comprised corporate associates Ali Alahmad and Sophie Lundsberg; tax partner Alex Jupp; employment of counsel Helena Derbyshire and European counsel Damian Babic; IP and data privacy counsel Eve-Christie Vermynck; and banking partner Clive Wells and associate Zoe Cooper Sutton.
Meanwhile, the Linklaters deal team, headed by global head of corporate Simon Branigan and global head of real estate Andy Bruce, included corporate counsel Christopher Quinn, managing associate Richard Ness, and TMT associate Danny Greenland.
The agreement builds upon the enduring relationship between Linklaters and Yum, which previously included advising the Kentucky-based company on the divestiture of subsidiary Pizza Hut’s 330 UK restaurants to restructuring investor Rutland Partners in 2012.
Yum Brands, the owner of various franchises including Taco Bell, expressed that the KFC deal presents a noteworthy opportunity to expedite KFC’s growth strategy in the expansive and burgeoning market of the UK and Ireland.
Yum Brands reported that KFC UK and Ireland experienced a 7% increase in system sales and a 5% rise in same-store sales this year across its 1,040 restaurants. Additionally, KFC has opened 200 new restaurants in the market since 2018 and has previously outlined intentions to open an additional 500 by 2030.
Meanwhile, EG indicated that it plans to utilize the proceeds from the sale to reduce its debt. In a statement, the group mentioned that the transaction marks an additional move in the company’s strategy to reduce leverage and achieve a sustainable capital structure.
EG Group continues to operate franchise businesses under brands such as Starbucks, Subway, Greggs, Sbarro, Chaiiwala, and Cinnabon, along with its wholly-owned bakery business, Cooplands.
The completion of the sale is anticipated in the first half of 2024, and the specific terms of the deal have not been disclosed.
