Denuo advises Smart Service on acquisition of KFC business in Russia

Denuo has advised Smart Service, a Russian operator led by Konstantin Kotov and Andrey Oskolkov, on the acquisition of KFC’s business in Russia from Yum! Brands, a US fast food corporation. Mr Kotov and Mr Oskolkov already own Food Service, a Russian operator of more than 40 KFC franchise restaurants.

The acquisition, which was announced in October 2022 and received all necessary approvals from the Federal Antimonopoly Service of Russia, the Government Commission for Control over Foreign Investment in Russia and the US government, includes equity KFC restaurants in Russia, the operating system, master franchise rights in respect of all Russian restaurants and the trademark for the Rostic’s brand. With the completion of the transaction, Yum! Brands and KFC have ceased their corporate presence in Russia.

As part of the sale and purchase agreement, Smart Service will retain Yum! Brands’ employees in Russia and will lead the process of rebranding KFC restaurants in Russia to Rostic’s. Smart Service will initially convert their more than 100 KFC restaurants in Russia to Rostic’s. As master franchisor, the company will also be responsible for working with other franchisees in Russia to rebrand to Rostic’s, a process which will be implemented over time.

Denuo provided full legal and regulatory support for the transaction. The Moscow-based team was led by Corporate partner Igor Antonyan, alongside Antitrust partner Denis Gavrilov. They were assisted by Corporate legal directors Maria Shevchenko and Leonid Petrov, Corporate associate Dmitry Ostrey and others, Antitrust senior associate Karin Ovakimyan and associate Alexander Silakov. Tax matters were covered by partner Igor Venediktov and legal director Igor Arakelov; Intellectual property matters were covered by Intellectual Property legal director Roman Golovatsky and other members of the Intellectual Property team.

Our team is pleased to have assisted the client with this landmark transaction in the Russian food and beverage industry. In addition, we are excited to see the return of the “Rostic’s” brand to the Russian market and to follow up on further development of the restaurant’s network under this brand. We have no doubt that our client’s vision and determination in this business will be a positive factor for the overall growth and development of the local market.

Igor AntonyanPartner