Yum!’s Bid For Little Sheep Earns Government Approval

Yum! Brands’ bid to acquire Little Sheep Group Ltd., the Chinese operator and franchisor of hot pot restaurants, has been approved by China's Ministry of Commerce.

Once the deal has been finalized in a vote by shareholders, Louisville, Ky.-based Yum! will own 93.2% of Little Sheep. The remaining 6.8% stake will belong to the chain’s founders. Little Sheep, based in Baotou, Inner Mongolia, has more than 450 company-owned and franchised restaurants across China and another 22 overseas. It specializes in Mongolian hot pot, in which customers dip meat and vegetables into communal broth.

“This is another important step in executing our strategy of being rooted in China, part of China,” said Jing-Shyh Sam Su, chairman and CEO of Yum! Restaurants China.

The parent company of Taco Bell, KFC and Pizza Hut first announced last April its $860 million deal to buy more than 90% of Little Sheep. The acquisition strengthens Yum!’s presence in China--its top market terms of restaurant development--and allows it to offer a local specialty in a market overwhelmingly dominated by independent operators. The company, which has opened 3,475 KFC units and nearly 700 Pizza Hut units in China since 1987, announced last week that it anticipates 600 new openings in 2011.

 

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