A consortium backed by sovereign fund China Investment Corp has expressed interest in buying a majority stake in Yum Brands Inc’s China business, which runs more than 7,100 KFC and Pizza Hut eateries across the country, Bloomberg reported on Tuesday [19 April 2016]. KKR & Co, a firm reported to be in the consortium, said in an e-mail to China Daily that it was “unable to comment on market speculation”…Full Article: ECNS.cn Apr 2016

Key Point

  • Baring Private Equity Asia, a private equity firm that is also part of the investor group, is currently conducting due diligence on Yum Brands’ new Chinese division.

ChinaAg Comments

  • Yum Brands tentatively plans to split off its Chinese division into a separate company in before the end of 2016. The new company may be listed on the New York Stock Exchange or Hong Kong Stock Exchange.
  • In March 2016, the private equity firms of KKR and Hopu Investments were rumored to be investors in Yum Brands’ new Chinese spinoff.
  • In late-October 2015, Yum Brands announced it would split off its Chinese division into a separate company.
  • In May 2015, COFCO and CIC announced plans to establish a joint venture (80.1% COFCO, 19.9% CIC) in order to eventually list COFOC’s newly acquired grain, oil and sugar assets (e.g. Huafu Group, Noble Group’s Agribusiness Division, and Nidera)
  • In November 2012, China Investment Corporation was seeking to purchase a 12.5% stake in Island Timberlands (IT), a company that manages timber forest located primarily on Vancouver Island, British Columbia, Canada.
  • In 2007, China established the China Investment Corporation (CIC) in Beijing when its Ministry of Finance issued CNY 1.5 trillion worth of special bonds to finance its formation. China Investment Corporation is a state-owned company that manages part of the country’s foreign-exchange reserves.
  • Founded in 1997 and headquartered in Hong Kong, Baring Private Equity Asia is a private equity firm whose investment portfolio includes China Shengmu Organic Milk (January 2014), COFCO Meat (June 2014), and Weetabix (April 2015).

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