By Rajasik Mukherjee

March 31 (Reuters) - Australia's Collins Foods ( CLLFF )

said on Tuesday it would hand over 20 of its 27 Taco Bell

restaurants in the country to an affiliate of Yum Brands ( YUM )

and Restaurant Brands, moving closer to a full exit from the

loss-making business.

The remaining seven would be closed in the coming weeks, the

fast-food chain operator added.

The transaction was part of its previously flagged strategy

to exit Taco Bell in Australia and refocus on its core KFC ( YUM )

franchise in Australia and Europe, particularly Germany.

Yum owns several fast-food chains including KFC ( YUM ), Pizza Hut

and Taco Bell, while Restaurant Brands, formerly listed in New

Zealand, was acquired by Mexico's Finaccess last year.

The deal involves a nominal purchase price, with the new

owners assuming lease liabilities for the 20 restaurants from

completion.

"On balance, we view the transfer of the 20 TB stores for a

nominal amount as a slight positive," said Michael Toner, RBC

Capital Markets analyst.

"For the remaining 7 locations, we note heightened

competition between QSR operators to secure sites, and are

optimistic that CKF is able to dispose of these leases

relatively cleanly."

Collins has been paring back its Taco Bell exposure as it

doubles down on KFC ( YUM ), its biggest revenue generator.

Last April, the company said it planned to open 40-70 new

KFC ( YUM ) outlets in Germany over five years, arguing that the fried

chicken brand was "under-penetrated" in the country.

Meanwhile, KFC Australia posted interim revenue of A$563.8

million ($385.6 million), while Taco Bell recorded a nearly 4%

drop in revenue for the half-year ended October 12, 2025.

Shares of Collins fell 3.8% to A$8.450, their lowest since

June 24, 2025, as of 0032 GMT.

($1 = A$1.4620)