Yum To Take Little Sheep Private For $862 Million

Yum! Brands

, the owner of the KFC and Taco Bell fast-food chains, said it will take Little Sheep, the operator of Chinese hotpot restaurants, private in a deal valued at $862 million. Yum already owns more than 27% of Mongolia-based Little Sheep. Under the terms of the deal, Yum will own 93.2% of the company and Little Sheep founders will own the remainder. Kentucky-based Yum has been a Little Sheep investor since 2009. The highly fragmented domestic restaurant industry in China has seen intensifying competition over the past years. In such a highly competitive market, Yum! believes that the privatization of Hong Kong-listed Little Sheep will enable the business to achieve a more economically viable business model in the market and to better tap its potential opportunities, the companies said in a statement. Formerly part of PepsiCo

, the world's second-largest soft drink maker, Yum has risen to prominence in China primarily through the popularity of the KFC brand. The company gets 36% of its annual revenue from China, according to Bloomberg News. On its Web site, Yum says it operates 3,200 outlets in 700 Chinese cities and that it also has 520 Pizza Hut stores in over 130 cities in the world's fastest-growing major economy.