A consortium that includes KKR, Hillhouse Capital and Baring Private Equity Asia is considering a take-private buyout of Yum China, a publicly traded operator of fast food restaurants with a market cap of some $13.6 billion, according to Bloomberg. Yum China spun out of the larger Yum! Brands business in 2016 and began trading on the NYSE. The company, which owns the rights to KFC, Pizza Hut and Taco Bell in China, controls more than 8,000 restaurants in the nation.
DCP Capital—which is led by former KKR executive David Liu—and the China Investment Corporation sovereign wealth fund are also said to be part of the would-be takeover group. It's believed the potential buyers could be eying an acquisition with the ultimate aim of re-listing Yum China in Hong Kong at some point in the future.
A deal would mark private equity's second major fast-food deal in China in the past year-plus. Last summer, The Carlyle Group and CITIC Capital Partners purchased the McDonald's business in mainland China and Hong Kong for more than $2 billion, acquiring the rights to nearly 2,500 locations.
A takeover of Yum China at a value around the company's current market cap would be set to become the largest private equity deal involving a company in the restaurants & bars sector anywhere around the world since the start of 2008, according to the PitchBook Platform. The top spot currently belongs to JAB and BDT Capital Partners' $7.16 billion purchase of Panera Bread completed last summer.
The report also comes at a time when major buyout shops are showing more interest than ever in Asia. KKR, Carlyle and Blackstone are among the industry heavyweights to close major new vehicles focused on the region in the past two years—and with billions stocked up, more headline-grabbing deals will surely be on the way.
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