Carlyle Group Inc (CG.US) and YUM CHINA (09987) compete to acquire Yum China's KFC and Pizza Hut business, with the transaction amount possibly reaching $400 million.

According to reports, companies such as Carlyle Group Inc (CG.US) and YUM CHINA (09987) are competing to acquire Yum China, which owns the KFC, Pizza Hut, and PHD chain stores in Hong Kong, Taiwan, and other Asian markets. The deal is estimated to be around $400 million. Potential bidders also include Taiwan's food giant Uni-President Group and other private equity firms. Non-binding bids for Yum China are expected to be submitted this week. Yum China is headquartered in Hong Kong and operates around 1000 KFC and Pizza Hut stores in Hong Kong, Macau, Myanmar, Taiwan, and Vietnam, employing around 25,000 staff. The company also owns the pizza delivery chain PHD in Hong Kong. Sources reveal that the overall business has an EBITDA of approximately $35-40 million. Global fast food chains operating in Asia have benefited from urbanization, a youthful population, and the increasing demand for convenient and affordable dining options. This has attracted significant investment from local strategic investors and private equity firms over the past decade. A report by ResearchandMarkets.com last year projected that the fast food market in the Asia-Pacific region will reach around $270 billion by 2024 and is expected to grow to $465 billion by 2033. Both Carlyle Group Inc and YUM CHINA have extensive experience in the fast food industry. Carlyle Group Inc announced the acquisition of 100% ownership of KFC in South Korea last December. In early 2017, Carlyle Group Inc, together with a consortium, acquired the 20-year operating rights of McDonald's Corporation in China for $2.08 billion and is set to sell their shares back to McDonald's Corporation by 2023, earning substantial returns. YUM CHINA was spun off from Yum! Brands, Inc. in 2016 and operates KFC, Pizza Hut, and other brands in mainland China. Spring Capital and Ant Group are its main investors. Sources also added that Yum China is not opposed to selling individual market operations or selling the entire business as a package, depending on the terms of the offer. This sale is part of Yum China's efforts to reallocate funds into its core business.