KFC

Yum! Buys $200 Million in Grubhub Shares in Drive to Push KFC, Taco Bell Sales

11:22 AM, Feb 8, 2018 — Yum! Brands (YUM) announced plans to buy stock worth $200 million in online food-ordering company Grubhub (GRUB), giving a liquidity injection as the firms also outlined a partnership to drive sales at Yum’s KFC and Taco Bell restaurants.

Chicago-based Grubhub will expand its board of directors by one to 10, adding Artie Starrs, the president of Pizza Hut US which is another Yum property, the companies said in a statement on Thursday.

“We are committed to making our iconic brands easier to access through online ordering for pickup and delivery, and aggressively pursuing delivery as a strategic global growth opportunity,” Yum’s chief executive officer, Greg Creed, said in the statement. Nearly half of the company’s 45,000 restaurants are already offering the online service, he said.

KFC, Taco Bell and Grubhub will work with owners of the fast-food franchises to test online ordering for pickup and delivery. The initial phase will be rolled out over the coming months, the companies said.

Grubhub will use the liquidity from the Yum stock purchase to grow its US delivery network, drive more orders to Yum restaurants and improve ordering and delivery services.

Grubhub has about 80,000 restaurant partners in more than 1,600 US cities and London, the company said. It separately reported Thursday fourth quarter earnings and sales that came in better than analysts expected, with an outlook on sales in the first quarter and all of 2018 that was in line with Wall Street’s expectations.

Louisville, Kentucky-based Yum’s fourth quarter adjusted earnings rose year-on-year, while revenue in the three months was just shy of what analysts were predicting.

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