Yum Brands Inc.‘s preliminary offer to take full control of Little Sheep Group Ltd., the operator of a popular hot-pot chain in China, has signaled a new growth strategy for Yum’s largest market.
Analysts said the move indicates that Yum, which has 3,800 KFC and Pizza Hut outlets in China, is looking beyond pizza and chicken to establish its own presence in the rapidly growing market for Chinese casual dining.
Yum bought a 20% stake in Little Sheep in 2009 and increased its stake to 27.2% last year.
Yum said after the close of Hong Kong trading Tuesday that the company had submitted a preliminary proposal to buy all of Little Sheep’s outstanding shares, apart from a minority stake to be owned by the chairman and other founders. More.