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Yum! Brands Announces Primavera Capital Group and Ant Financial Services Group to Make Strategic Investment in Yum China

LOUISVILLE, Ky. & SHANGHAI--(BUSINESS WIRE)--Yum! Brands, Inc. (NYSE: YUM) today announced that it has entered into agreements with Primavera Capital Group, a China-based global private equity firm, and Ant Financial Services Group, one of the world’s leading online and mobile financial services providers that operates the widely used Alipay mobile payments platform, to invest a total of $460 million in Yum China, concurrent with the completion of Yum China’s spinoff from Yum! Brands.

“The investments from Primavera and Ant Financial in Yum China mark another important milestone in our plans to separate the China business and create a solid foundation for Yum China as it prepares to become an independent restaurant powerhouse”

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The spinoff and concurrent completion of the Primavera and Ant Financial investments are expected to occur on October 31, 2016, with Yum China to commence trading on the New York Stock Exchange as an independent company on November 1, 2016, under the ticker symbol “YUMC.”

Under the terms of the agreements, Primavera and Ant Financial will invest $410 million and $50 million, respectively, in Yum China. The final number of shares issued to Primavera and Ant Financial will be subject to a post closing adjustment such that the effective price will be equal to an 8% discount to the volume-weighted average trading price of Yum China’s equity value during the period commencing 31 days and ending 60 days following completion of the spinoff (subject to a collar mechanism limiting the minimum and maximum shares to be issued). Primavera and Ant Financial will also receive two tranches of warrants to acquire shares of Yum China common stock reflecting approximately 2% equity ownership interest (in the aggregate) in each tranche to be exercisable in the five-year period following the issuance of those warrants, with strike prices correlating to equity values of $12 billion and $15 billion.

The Company also announced that founder of Primavera Dr. Fred Hu, former Chairman of Greater China at Goldman Sachs, will become Non-Executive Chairman of the Board of Yum China.

“We have long admired the Yum China business and are looking forward to collaborating with the Board and management to realize the company’s full potential,” said Dr. Hu of Primavera. “Yum China is an established leader in the retail and restaurant industry which we believe is poised for continued strong growth and unit expansion as cities across China invest in new transportation hubs, shopping malls and other physical and electronic infrastructure that will support consumption. I look forward to leading the Board of Directors of Yum China in its new and exciting chapter as an independent company.”

“Through this collaboration, we aim to help Yum China provide world-class mobile payment services for tens of millions of customers across its brands. 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...


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