Yum Brands could sell chunk of China business

Fast food giant Yum Brands was said to be considering selling a chunk of its Chinese operation on Wednesday, as part of a plan to spin-off the once rocketing division in a country infatuated with American-style takeaways.

The New York-listed operator of the KFC, Pizza Hut and Taco Bell franchises was reported to have entered talks with a number of financial firms about selling a stake of as much as 20% in its China division.

Yum’s operation in the People’s Republic could be worth as much as $10bn (£7.1bn), the Wall Street Journal said.

The company was planning to spin off and list Yum China by the end of the year, with the shares trading in New York and possibly in Hong Kong. Its 6,900-strong Chinese estate contributed around half of Yum's total sales.

Food scandals and mistakes in marketing hit the division hard in 2014 and 2015, though it had since recovered and had EBITDA of $1bn (£0.71bn) last year.

It’s understood KKR & Co and Baring Private Equity Asia were looking into a possible investment, as well as a number of Chinese funds. The WSJ said Yum appeared focused on selling a 19.9% stake, to avoid a hefty tax obligation from any deal.

At 1650 GMT, shares in Yum Brands were up 1.84% in New York to $80.43.