New | Alibaba’s payments unit and Primavera Capital to invest in Yum Brands’ China spin-off

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Yum’s China unit to operate independently from Yum Brands’ worldwide business, list on New York Stock Exchange on November 1

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Alibaba’s electronic payments unit and a private equity fund will make strategic investments in Yum Brands’ KFC and Pizza Hut outlets in China. Photo: Reuters

Celine Ge

Published: 9:20pm, 2 Sep 2016Updated: 11:30pm, 2 Sep 2016

Alibaba Group’s electronic payment unit and a private equity fund plan to make strategic investments in the China business of Yum Brands, which will be spun off as part of the parent’s plan to list the operation on the New York Stock Exchange.

The spin-off and concurrent completion of the US$460 million investments in Yum China by Ant Financial Services Group and Primavera Capital Group are expected to take place on October 31, with Yum China to begin trading in New York on November 1, according to a press statement by Yum Brands, which manages KFC and Pizza Hut outlets around the world.

Fred Hu, the former greater China chairman of Goldman Sachs, and founder of Primavera, will become Yum China’s non-executive chairman after the deal, according to the statement.

Primavera would invest US$410 million in Yum China, while Ant Financial would invest US$50 million, the statement said. Ant’s parent Alibaba also owns the South China Morning Post.

The spin-off will enable Yum China to operate independently from the remainder of Yum Brands’ global business.

“The investments from Primavera and Ant Financial in Yum China mark another important milestone in our plans to separate the China business and create a solid foundation for Yum China as it prepares to become an independent restaurant powerhouse,” said Greg Creed, chief executive of Yum Brands.

Through its investment, Ant Financial will enable its Alipay electronic payment system to be used at Yum China’s KFC and Pizza Hut outlets.