Yum Brands Says It Is ‘Moving Full Steam Ahead’ With The Separation Of Its Chinese Business
Yum Brands (NYSE: YUM), the parent company of fast food chains Pizza Hut, Taco Bell and Kentucky Fried Chicken, announced back in October 2015 that it will seperate its corporate structure into two separate businesses.
Yum Brands said that its first business will be named “Yum! Brands” and consist of its KFC, Pizza Hut and Taco Bell chains across the world, except for China. As such, its second business will be called “Yum! China” and consist of the company’s three restaurant brands in China.
Both businesses will become completely independent and publicly-traded. The reason for the business split was to create two best-in-class companies and better allow each segment to focus on their respective regions.
The company argued at the time that its new Yum Brands business will offer investors a more stable earnings stream. Yum China will also become Yum Brands’ largest franchisee and operate under a Franchise Agreement. As such, Yum Brands also stands to benefit from the rise in popularity of American-brand restaurants in China.
On Monday, Yum Brands provided an update to its efforts and said it is “moving full steam ahead with the separation.” The company also confirmed a date for when the separation will officially occur: October 31, 2016.
Yum China will begin trading on the New York Stock Exchange for the first time ever on November 1, 2016, under the stock symbol “YUMC.”
“This is an exciting time for Yum China as we approach our launch as a new, independent public company,” said Micky Pant, Chief Executive Officer of Yum China. “Yum China has a leading position in the Chinese market, and we see tremendous opportunities to leverage our well recognized brands and decades of experience to drive growth. We are all energized to achieve Yum China’s full potential and create sustained value for shareholders.”
Yum Brands also updated its recent shareholder friendly initiatives. Specifically, since the business separation was announced, the company bought back approximately $5.1 billion worth of its own stock at an average price of approximately $80 per share. An additional $1.1 billion worth of shares is scheduled to be repurchased throughout the remainder of 2016 which puts the company on target to achieve its previously announced plan of buying back $6.2 billion of stock.
Finally, the company also announced it will increase its dividend payments to investors by 11 percent to $0.51 per share, the first of which will be payable to shareholders on November 4, 2016 to investors of record as of October 19, 2016