Sovereign fund said to seek Yum China
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.