KFC and Pizza Hut owner Yum Brands Inc said Chinese investment firm Primavera Capital Group (春華資本) and an affiliate of Alibaba Group Holding Ltd (阿里巴巴) will buy a stake in Yum China for US$460 million as Yum prepares to spin off the business.
The deal gives Primavera, a powerful China-focused private equity firm founded by an ex-Goldman Sachs banker, a significant stake in Yum’s China business.
It also further expands the reach of Ant Financial Services Group (螞蟻金服), which runs Alibaba’s Alipay (支付寶) mobile payments platform and has been expanding into China’s restaurant industry.
The investors will receive warrants to buy an additional 4 percent stake in Yum China in two tranches at valuations of US$12 billion and US$15 billion, the company said on Friday.
A Yum spokesman said the use of the proceeds from the deal will be determined by the future Yum China board of directors.
Yum has signaled that part of the money could go toward expanding across China, as the company signaled in October last year that it hoped to nearly triple the amount of its restaurants in China to 20,000.
Yum’s China business has hit road blocks in recent years, including a scandal at a minor meat supplier and bird flu outbreaks. The largest fast-food chain in China has also been losing ground to McDonald’s Corp.
The Louisville, Kentucky-based company’s move to separate its China business followed pressure last year from one of its largest investors, Corvex Management, the activist hedge fund run by Keith Meister. Meister is on Yum’s board.
The spinoff is expected on Oct. 31, with Yum China to begin trading on the New York Stock Exchange a day later, the company said.
Primavera will invest US$410 million, while Ant Financial will put in US$50 million. China’s sovereign wealth fund and New York private equity firm KKR & Co were also in the hunt for a Yum China stake.
Primavera’s founder, Fred Hu (胡祖六), is to become non-executive chairman of Yum China’s board.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
Microsoft Corp yesterday said that it would create Thailand’s first data center region to boost cloud and artificial intelligence (AI) infrastructure, promising AI training to more than 100,000 people to develop tech. Bangkok is a key economic player in Southeast Asia, but it has lagged behind Indonesia and Singapore when it comes to the tech industry. Thailand has an “incredible opportunity to build a digital-first, AI-powered future,” Microsoft chairman and chief executive officer Satya Nadella said at an event in Bangkok. Data center regions are physical locations that store computing infrastructure, allowing secure and reliable access to cloud platforms. The global embrace of AI
Qualcomm Inc, the world’s biggest seller of smartphone processors, gave an upbeat forecast for sales and profit in the current period, suggesting demand for handsets is increasing after a two-year slump. Revenue in the three months ended in June will be US$8.8 billion to US$9.6 billion, the company said in a statement Wednesday. Excluding certain items, earnings will be US$2.15 to US$2.35 a share. Analysts had projected sales of US$9.08 billion and earnings of US$2.16 a share. The outlook signals that the smartphone market has begun to bounce back, tracking with Qualcomm’s forecast that demand would gradually recover this year. The San