LOUISVILLE, Kentucky: Yum Brands is selling Pizza Hut in a US$2.7 billion deal, ending its ownership of the iconic pizza chain as it shifts focus toward faster-growing businesses within its restaurant portfolio.

The transaction announced on June 16 will split Pizza Hut between two buyers. Private equity firm LongRange Capital will acquire Pizza Hut's operations outside mainland China for about $1.5 billion, while Yum China Holdings will purchase the mainland China business for approximately $1.2 billion.

China is Pizza Hut's second-largest market after the United States and accounts for 19 percent of the chain's sales.

The sale follows years of challenges for the 68-year-old brand, which has struggled to keep pace with changing consumer habits and growing competition in the pizza and food-delivery sectors.

Yum Brands, which also owns KFC and Taco Bell, began exploring strategic options for Pizza Hut in November. While Yum's global sales rose five percent last year, Pizza Hut's sales declined two percent.

In February, Yum announced plans to close 250 Pizza Hut locations in the United States. At the end of last year, the chain operated 19,974 restaurants worldwide.

"Pizza Hut has long been the weak link in Yum's portfolio," said Neil Saunders, managing director of GlobalData.

"Despite efforts to revitalize the brand and shut underperforming locations, it has become increasingly clear that pushing the division back into growth will require a level of investment and patience that Yum is just not prepared to commit to."

Founded in 1958 in Wichita, Kansas, Pizza Hut began when two brothers borrowed $600 from their mother to open a pizza restaurant. The name was chosen because the store's sign had room for only eight letters.

The company's distinctive red-roof restaurants first appeared in 1969, and by 1971, Pizza Hut had become the world's leading pizza chain by sales. PepsiCo acquired the company in 1977 before spinning off its restaurant operations as Yum Brands in 1997.

The chain's fortunes shifted as consumer preferences evolved. Domino's gained ground in the 1980s with its emphasis on fast delivery, while Pizza Hut remained heavily invested in larger dine-in restaurants.

More recently, the rise of food-delivery platforms such as DoorDash and Uber Eats has intensified competition by giving consumers easy access to a wide range of restaurant options beyond pizza.

Yum Chief Executive Officer Chris Turner said the sale would allow the company to concentrate on brands that are generating stronger growth.

"Under LongRange and Yum China, Pizza Hut will be well positioned for future growth with ownership that brings deep expertise in the restaurant industry," Turner said in a statement.

Yum expects both transactions to be completed during the third quarter. Shares of the Louisville-based company rose 2.3 percent following the announcement.