Yum! to acquire 20% stake in Little Sheep Group

by Eric Schroeder
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LOUISVILLE, KY. — Yum! Brands, Inc., parent of KFC, Pizza Hut and Taco Bell, has reached agreement to acquire 20% of the outstanding common shares of Little Sheep Group Ltd., a leading restaurant brand headquartered in Inner Mongolia, for approximately $63 million.

Little Sheep operates 375 restaurants, primarily in China as well as Hong Kong, Japan, Canada and the United States. The restaurants specialize in Mongolian-style Hot Pot cuisine characterized by a proprietary soup base and Mongolian lamb specialties for lunch and dinner.

"Our strong position in China allows us to identify opportunities for strategic partners such as Little Sheep, a leading concept with strong branding and a nationwide network," said Sam Su, president of Yum! Restaurants and vice-chairman of Yum! Brands.

China has been an area of growth for Yum! over the past several years. During the past three years, the company’s China division has opened nearly 1,500 restaurants and generated compounded annual growth rate of 29% for system-wide sales and 31% for operating growth. The China division is the highest margin and highest return business in Yum’s global portfolio.

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