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Yum! Brands (YUM) Stock Sizzles, Spinning Off China Business

NEW YORK (TheStreet) -- Yum! Brands (YUM - Get Report) stock is rallying 4.76% to $75.21 on Tuesday after the company announced that it will separate Yum! China into a publicly-traded franchisee in Mainland China.

The new entity will pay a portion of its sales to its parent company for exclusive rights to three brands, including KFC, Pizza Hut and Taco Bell, according to CNBC.com.

The transaction is expected to close by the end of 2016 and is intended to be tax-free to shareholders.

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CEO Greg Creed will continue to head Yum! Brands and CEO Micky Pant, who was named CEO of the China business in August, will head Yum! China.

"We view today's announcement as a large positive, as it will get Yum! Brands off of the China roller coaster in a meaningful way, and allow for better focus on enhancing non-China business lines (although more could and should be done)," Nomura Securities stated.

In addition, this separation comes after activist investor Keith Meister put pressure on the company to reorganize its business.

"The separation of these two businesses...


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