The two parties are advancing in discussions about a potential deal that could come together in several weeks, the source said, adding there is no guarantee a deal will be reached.
The move comes when the fast-food industry is contending with sustained demand weakness, as growing adoption of GLP-1 weight-loss drugs encourages consumers to choose healthier foods.
The pressure has been compounded by rising inflation and a decline in consumer sentiment, which has forced diners to think twice before eating out and weighed on U.S. pizza giants already facing elevated commodity costs.
Last year, Yum said it was reviewing "strategic options," including a possible sale, for Pizza Hut as the unit struggles to keep pace with its other fast-casual dining brands, including Taco Bell.
U.S. comparable sales at Pizza Hut, which contributed 12% to Yum's total revenue in 2025, have declined for 10 straight quarters.
