Yum Brands, the parent company of KFC and Pizza Hut, is looking into a spin off later this year and they’ve announced that they will be selling a stake in the China unit of said spin off once it is announced.
On Friday, the company said that it had struck deals to sell stakes to private equity firm Primavera Capital Group, and online and mobile financial services provider Ant Financial Services Group for a total of $460 million. It also said that Fred Hu, found of Primavera, will become the non-executive chair of Yum China’s board.
Both the deal and the spin off are expected to be completed by October 31st of this year. And the shares of Yum China will begin trading on the New York Stock Exchange the next day under the ticker YUMC.
Previously, Yum Brands Inc. had announced the spin off of its Chine business due to the pressure after food scares and marketing missteps that hurt sales at both KFC and Pizza Hut. In 2015, the sales at established locations were 4% for the China unit, following a 5% decline in the previous year. In China alone, Yum has more than 7,000 KFC and Pizza Hut outlets, which is also a key region for the company and that accounts for about half its revenue. This is due to the fact that the company owns all the restaurants in China, as opposed to the US where they franchise more.