China’s Ministry of Commerce Approves Yum! Brands Proposal to Acquire China’s Little Sheep Restaurants


  • Co-founders Mr. Zhang Gang and Mr. Chen Hongkai will retain minority interest and remain as shareholders in Little Sheep post transaction
  • Cash cancellation consideration of HK $6.50 cash per share


Hong Kong, November 7, 2011 – Yum! Brands, Inc. (NYSE:YUM; “Yum!”) announced that it has obtained written clearance today from China’s Ministry of Commerce under the Anti-Monopoly Law of the People’s Republic of China to proceed with its proposal for the privatization of Little Sheep Group Ltd. (HKEx: 968; “Little Sheep”) by way of a scheme of arrangement (“Scheme”). Under the proposal, Yum! will, through an indirectly wholly owned subsidiary, offer Little Sheep scheme shareholders HK $6.50 cash per Scheme share. Little Sheep operates hot pot concept restaurants primarily in China and is headquartered in Baotou, Inner Mongolia, China. Its shares are listed on the Hong Kong Stock Exchange. Yum! currently owns approximately 27.2% of the outstanding shares of Little Sheep, whose founders, Mr. Zhang Gang, Chairman, and Mr. Chen Hongkai, Non-executive Director, will remain as shareholders in Little Sheep alongside Yum! following the implementation of the Scheme.

The proposal remains subject to various conditions, including the approval of Little Sheep shareholders. If the conditions are fulfilled and the Scheme is implemented, Yum! will operate and manage the business, and will own approximately 93.2% of the issued share capital of the Company, with the remaining approximately 6.8% held by the participating founders.

“We are pleased we have received approval from the Ministry of Commerce to proceed with our proposed privatization of Little Sheep restaurants. 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, Vice-Chairman of Yum! Brands, Inc. “We look forward to completing this transaction and are confident we can strengthen the Little Sheep brand and satisfy consumer demand for the hot pot concept.”

Since entering the China market in 1987, Yum! has shown great commitment to China and to servicing their Chinese customers. China has become Yum!’s number one market in terms of restaurant development. Yum! expects to use its experience in China restaurant operations to further develop the Little Sheep brand to become an even stronger leader in the hot pot business.

The Scheme document will be issued in due course, and will include recommendation from Independent Board Committee and its independent financial advisor. A Special General Meeting of shareholders will be convened at a time to be announced for scheme shareholders to vote on the transaction.

About Yum! Brands and Yum! China
Yum! Brands is listed on the NYSE (YUM). It is the world’s largest restaurant company based on number of system units, with nearly 38,000 units in more than 110 countries and territories. Through the three concepts of KFC, Pizza Hut and Taco Bell, Yum! develops, operates, franchises and licenses a worldwide system of restaurants which prepare, package and sell a menu of competitively priced food items.

Based in Shanghai, the China division of Yum! Brands, Inc. is recognized for its size, unique strength and importance. In 2010, the China division of Yum! Brands, Inc. opened more than 500 new restaurants in mainland China. KFC also continues to be the number one quick-service restaurant brand in mainland China today, with over 3,400 restaurants in more than 700 cities. Pizza Hut is also the number one casual dining brand in mainland China with over 550 Pizza Hut Casual Dining restaurants in over 130 cities.

About Little Sheep Group Ltd
Little Sheep is a company incorporated in the Cayman Islands with limited liability, whose shares have been listed on the Main Board of The Stock Exchange of Hong Kong Limited since June 12, 2008. The Little Sheep Group is principally engaged in the operation of a full-service restaurant chain, provision of catering services and sale of related food products.


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