Yum! Brands Closes $1.2B Pizza Hut China Sale, Amends KFC/Taco Bell License with Yum China
YUM is trading near its 52-week low of $137.33 (11% above the low).
Summary
Yum! Brands closed the $1.2 billion sale of Pizza Hut China to Yum China and amended its master license agreement to focus on KFC and Taco Bell growth in the region.
Key Events · M&A and Partnerships · YUM
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Pizza Hut China Sale Completed
Yum! Brands received $1.2 billion in cash from Yum China for the Pizza Hut business in Mainland China, completing the first part of the $2.7 billion global Pizza Hut divestiture.
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Amended Master License Agreement
The A&R MLA removes Pizza Hut, adds KFC system sales growth incentives over 12 years, and establishes a framework for Taco Bell development in China, with Yum China guaranteeing the obligations.
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Remaining Pizza Hut Sale on Track
The sale of Pizza Hut outside Mainland China to LongRange Capital is expected to close this month, subject to regulatory approvals.
Analysis · YUM · Trade & Services
Yum! Brands completed the sale of Pizza Hut China to Yum China for $1.2 billion in cash, finalizing one leg of the $2.7 billion Pizza Hut divestiture announced in June. The deal removes Pizza Hut from the master license agreement and adds performance incentives for KFC growth and a framework for Taco Bell expansion in China. The cash proceeds strengthen Yum's balance sheet ahead of the remaining Pizza Hut sale to LongRange Capital, expected this month.
At the time of this filing, YUM was trading at $152.62 on NYSE in the Trade & Services sector, with a market capitalization of approximately $41.6B. The 52-week trading range was $137.33 to $170.14. This filing was assessed with positive market sentiment and an importance score of 8 out of 10.