Separation on Track to Be Completed on October
31, 2016
Dividend Increased 11%
Yum! Brands, Inc. (NYSE: YUM) today announced that its Board of
Directors has approved the previously announced separation of its
China business, now owned by Yum China Holdings, Inc. (Yum China),
from Yum! Brands, which is currently expected to occur after the
close of business on October 31, 2016. Yum China expects to begin
trading “regular way” as an independent company beginning November
1, 2016, on the New York Stock Exchange (NYSE) under the ticker
symbol “YUMC.” Yum! Brands expects “when-issued” trading for both
Yum! Brands and Yum China to begin on the NYSE on October 17, 2016,
under the symbol “YUM WI” for Yum! Brands and “YUMC WI” for Yum
China.
Yum! Brands also announced an increase in the Company’s
dividend.
“We are moving full steam ahead with the separation of Yum
China, establishing two powerful, independent and focused growth
companies dedicated to building on our brand strengths and
unlocking the full value of each business for our shareholders,”
said Greg Creed, Chief Executive Officer of Yum! Brands. “As one of
the world’s largest restaurant companies, Yum! Brands will continue
to focus on expanding the presence and performance of KFC, Pizza
Hut and Taco Bell as a primarily-franchised business to deliver
enhanced value to shareholders.”
“This is an exciting time for Yum China as we approach our
launch as a new, independent public company,” said Micky Pant,
Chief Executive Officer of Yum China. “Yum China has a leading
position in the Chinese market, and we see tremendous opportunities
to leverage our well-recognized brands and decades of experience to
drive growth. We are all energized to achieve Yum China’s full
potential and create sustained value for shareholders.”
Returning Capital to Shareholders
The Yum! Brands Board also declared an increased dividend of
$0.51 per share, payable on November 4, 2016, to shareholders of
record as of the close of business on October 19, 2016. This
dividend represents an 11% increase from the Company’s previous
quarterly dividend of $0.46 per share. Since initiating a dividend
in 2004, Yum! Brands is one of a select group of S&P 500
companies to annually increase its dividend at a double-digit
percentage rate.
Since Yum! Brands announced its intention to separate Yum China,
the Company has repurchased approximately $5.1 billion in shares at
an average price of approximately $80, reducing its share count by
approximately 15% as of September 23, 2016. Yum! Brands expects to
repurchase an additional $1.1 billion in shares before the end of
2016 to achieve its previously announced plan to return $6.2
billion of capital to shareholders (excluding dividends) in
connection with the separation of its China business.
Additional Details on Approval of Yum China
Separation
The Yum! Brands Board has approved a distribution of one share
of Yum China common stock for each share of Yum! Brands common
stock held at the close of business on October 19, 2016, the record
date for the distribution. No fractional shares of Yum
China common stock will be issued. Instead, the distribution
agent will aggregate fractional shares of Yum China common stock
and sell the whole shares in the open market. The aggregate net
cash proceeds of the sales will be ratably distributed to those
shareholders who would otherwise have received fractional shares of
Yum China common stock.
Yum! Brands shareholders are not required to take any action to
receive the shares of Yum China common stock in the distribution,
and they will not be required to surrender or exchange their Yum!
Brands shares. Importantly, the number of Yum! Brands shares owned
by each shareholder will not change as a result of the
distribution.
Yum! Brands intends for the distribution of Yum China common
stock to be tax-free for its shareholders, except with respect to
any cash received in lieu of fractional shares, and expects to
complete the distribution after the close of business on October
31, 2016. The separation and distribution remain subject to the
satisfaction or waiver of certain conditions and remains subject to
the sole discretion of the Yum! Brands Board.
About Yum! Brands
Yum! Brands, Inc., based in Louisville, Kentucky, has nearly
43,000 restaurants in almost 140 countries and territories. Yum!
Brands is ranked #218 on the Fortune 500 List with revenues of over
$13 billion in 2015 and is one of the Aon Hewitt Top Companies for
Leaders in North America. The Company’s restaurant brands – KFC,
Pizza Hut and Taco Bell – are the global leaders of the chicken,
pizza and Mexican-style food categories. Worldwide, the Yum! Brands
system opens over six new restaurants per day on average, making it
a leader in global retail development.
About Yum China Holdings, Inc.
Yum China Holdings, Inc. will become a licensee of Yum! Brands
in Mainland China. It will have exclusive rights in Mainland China
to KFC, China’s leading quick-service restaurant concept, Pizza
Hut, the leading casual dining brand, and Taco Bell, which is
expanding globally but is not yet in China. It will also own the
Little Sheep and East Dawning concepts outright. The new company
will be well positioned for growth thanks to its strong competitive
position, integration of its brands into Chinese popular culture
and consumers’ daily lives, expanding geographic footprint in China
and existing operational expertise. It will have a strong capital
position and no external debt and expects to continue growing its
system sales and profits by adding new restaurants and through
growing same-store sales. Yum China has more than 7,200 restaurants
in over 1,100 cities in China and generated over $8 billion in
system sales in 2015. The growth of consumption in China is being
fueled by a new generation of younger consumers who are digitally
sophisticated and brand driven. The additional growth of the middle
class and urban population in China is expected to create the
world’s largest market for restaurant brands, with Yum China poised
to be the market leader.
Cautionary Statement Regarding Forward-Looking
Statements
Certain statements in this communication contain
“forward-looking statements.” Forward-looking statements can be
identified by the fact that they do not relate strictly to
historical or current facts. These statements often include words
such as “may,” “will,” “estimate,” “intend,” “seek,” “expect,”
“project,” “anticipate,” “believe,” “plan,” “could,” “target,”
“predict,” “likely,” “should,” “forecast,” “outlook,” “model,”
“ongoing” or other similar terminology. Forward-looking statements
are based on our current expectations, estimates, assumptions or
projections concerning future results or events, including, without
limitation, the planned separation of the Yum! Brands and Yum China
businesses, the timing of such separation, the future earnings and
performance as well as capital structure of Yum! Brands or any of
its businesses, including the Yum! Brands and Yum China businesses
on a stand-alone basis if the separation is completed.
Forward-looking statements are neither predictions nor guarantees
of future events, circumstances or performance and are inherently
subject to known and unknown risks, uncertainties and assumptions
that could cause our actual results to differ materially from those
indicated by those statements. We cannot assure you that any of our
expectations, estimates or projections will be achieved. Factors
that could cause actual results and events to differ materially
from our expectations and forward-looking statements are included
in reports filed with the SEC by Yum! Brands from time to time,
including those discussed under the heading “Risk Factors” in our
most recently filed reports on Form 10-K and 10-Q, as well as in
the Form 10 filed with the SEC by Yum China. You should not place
undue reliance on forward-looking statements, which speak only as
of the date hereof. We are not undertaking to update any of these
statements.
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version on businesswire.com: http://www.businesswire.com/news/home/20160926005847/en/
Yum! Brands, Inc.Investor Relations:Keith Siegner,
888-298-6986Vice President, Investor Relations and Corporate
StrategyorElizabeth Grenfell, 888-298-6986Director Investor
RelationsorMedia Relations:Virginia Ferguson, 502-874-8200Director
Public Relations
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