Singapore’s Temasek Holdings and a consortium that includes China Investment Corp (CIC) and KKR & Co have advanced to a second round of bidding for a minority stake in Yum Brands’ China unit, people familiar with the matter told Reuters. Another private equity-backed consortium has also moved to the second round, they said, although its identity could not be immediately confirmed…The Global Times May 2016

Key Point

  • Yum Brands Chinese division is currently valued between US$8 billion to US$11 billion. The second round of bids is for approximately a 20% stake in the new company.

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 April 2016, China Investment Corp (CIC) announced it may invest the new Chinese division of Yum Brands.
  • In March 2016, Yum Brands announced it would open its first Taco Bell fast food restaurant in China by the end of the year. Additionally, Yum Brands opened its first Kentucky Fried Chicken (KFC) restaurant in Tibet.
  • As of December 2015, Yum Brands operated approximately 6,900 restaurants (e.g. KFC, Pizza Hut, etc.) in roughly 1,000 Chinese cities. During the same month, KFC announced it would open its first restaurant in Tibet in January 2016.
  • In late-October 2015, Yum Brands announced it would split off its Chinese division into a separate company.
  • In mid-October 2015, Yum stated it would lower its annual growth forecast in light of lackluster sales.
  • In August 2015, there was speculation that Yum Brands would spin off its KFC division after the CEO of Yum’s KFC Division transitioned to the CEO position of Yum China.
  • In June 2015, Kentucky Fried Chickens comprised 4,889 out of Yum’s 6,853 (or 71%) restaurants in China.
  • KFC is owned by Yum Brands, a company that also manages Taco Bell and Pizza Hut. The company also manages a high-end Italian restaurant in Shanghai called “Atto Primo”.

Similar Posts by ChinaAg

Spread the word. Share this post!