Sov­er­eign fund said to seek Yum China

China Daily (Canada) - - NEWS CAPSULE -

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.

US-base 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”.

The in­vestor group, which also in­cludes Bar­ing Pri­vate Equity Asia, is con­duct­ing due dili­gence on the unit, the re­port said. A deal could value Yum China at $7 bil­lion to $8 bil­lion, Bloomberg quoted un­named sources as say­ing.

A ma­jor­ity pur­chase by the CIC con­sor­tium would give a do­mes­tic en­tity con­trol of a lead­ing fast-food chain in the Chi­nese mar­ket for the first time. Such a deal would also pro­vide the Louisville, Ken­tucky-based Yum with cash that could be used to fund a div­i­dend and its planned share buy­back, as well as help re­duce ex­po­sure to a busi­ness with shrink­ing mar­ket share.

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