Taco Bell owner Yum adds burgers to menu with purchase of Habit
Yum! Brands Inc., the owner of Taco Bell, Pizza Hut and KFC, is adding hamburgers to its lineup with a $375 million deal to buy Habit Restaurants Inc.
Yum announced Monday it agreed to acquire Irvine, California-based Habit, which sells chargrilled burgers, ahi tuna sandwiches and milkshakes from about 300 locations, mostly company owned across the U.S. and China.
Habit Burger represents a new niche for Yum. As a fast-casual restaurant – meaning it’s typically more expensive than McDonald’s and Burger King – it still has drive-thru windows. Habit has also added self-ordering kiosks.
The acquisition is expected to close by the end of the second quarter, and Habit Burger will stay in Irvine and be managed by current Chief Executive Officer Russell Bendel, who will report to Yum CEO David Gibbs. Bendel said recently that the company had expanded its presence in China to seven locations and has seen interest from other potential international franchisees.
The deal also reflects the increasingly crowded U.S. restaurant market. New formats are growing in appeal as fast-food chains vie for customers with steep discounts, and higher labor costs compress profit margins.
Yum shares fell less than 1% to $101.73 at 10:50 a.m. in New York trading. The stock rose 9.6% last year, trailing the S&P 500 Index.