Yum Brands recently announced that it plans to sell a stake in its China unit. In addition, the parent company of KFC, Pizza Hut and Taco Bell plans to spin it off later this year. According to the company, they made deals to sell stakes to private equity firm Primavera Capital Group, and online and mobile financial services provider Ant Financial Services Group for around $460 million.
Moreover, Fred Hu will also become non-executive chair of Yum China’s board. Both the deal, and the spinoff, are expected to be completed on Oct. 31. Furthermore, shares of Yum China will begin trading on the New York Stock Exchange the next day under the ticker “YUMC.” Yum Brands Inc. experienced pressure due to food scares and marketing mistakes that damaged sales at KFC and Pizza Hut.
Throughout established locations in the China unit, sales were 4 percent last year–this comes after a 5 percent decline the year before. In China alone, Yum has over 7,000 KFC and Pizza Hut locations. This region accounts for half of its revenue. The reason is because the company owns these restaurants. Although, it franchises more in the U.S. and other parts of the world. Yum Brands Inc. is based in Louisville, Kentucky.