China-based Private-equity Firm Primavera And Ant Financial To Invest $460 Million In Yum China

By Markets MarketWatch Pulse

Yum Brands Inc. said Friday it has entered an agreement with China-based private-equity firm Primavera Capital Group and online financial services provider Ant Financial Services Group, in which the two will invest $460 million in Yum China, which Yum is spinning off. The spinoff and investment are expected to be completed on Oct. 31. Yum China will begin trading on the New York Stock Exchange on Nov. 1 under the ticker symbol 'YUMC,' Yum Brands said in a statement. Primavera and Ant Financial will be granted two tranches of warrants with each tranches giving them the option to buy up to 2% of Yum China's equity. The warrants can be exercised in the five-year period following their issuance, with strike prices equal to equity value of $12 billion and $15 billion. "Through this collaboration, we aim to help Yum China provide world-class mobile payment services for tens of millions of customers across its brands," said Eric Jing, President of Ant Financial Services Group. "These services include hassle-free Alipay for customers to help shorten queues at the cashier as well as membership solutions for Yum China designed to help manage their customer relations and promotions." Yum shares were not yet active in premarket trade, but are up 24% in the year so far, while the S&P 500 has gained 6%.

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