India, Jan. 2 -- India's KFC and Pizza Hut operators Sapphire Foods India Ltd. and Devyani International Ltd. are coming together in a $934-million deal, creating a fast-food powerhouse in the world's most populous country.

Backed by US-based Yum! Brands Inc., which owns both KFC and Pizza Hut brands, the share-swap deal will see Devyani International issue 177 shares for every 100 shares of Sapphire Foods. The merger is expected to generate Rs.210-225 crore annually from the second full year of operations, primarily due to lower royalty costs and reduction in corporate overheads.

"This combination will allow us to realise meaningful economies of scale, leverage a unified technology platform, and strengthen our supply-chain," Ravi Jaipu...