YUM - Can Yum! Brands Succeed Where Chipotle Failed?
Instead of breaking a habit Yum! Brands (NYSE: YUM) will be breaking in The Habit Restaurants (NASDAQ: HABT) later this year. The parent company behind Taco Bell, Pizza Hut, and KFC announced last month that it will be acquiring The Habit in a deal worth roughly $375 million.
The deal that should close no later than June will add a cult-fave burger concept to Yum! Brands' existing arsenal of quick-service Mexican, pizza, and fried chicken chains. It's a smart move in theory, but reality hasn't been as kind in the past. This isn't the first time that Yum! Brands is flipping burgers. It owned A&W before unloading the throwback burger chain in 2011. More recently, we had Chipotle Mexican Grill (NYSE: CMG) try and fail to get its TastyMade concept off the ground. Even with the recent white flags when it comes to red meat, the smart money here has to be with Yum! Brands passing this test with flying colors.
Image source: The Habit Restaurants.