Louisville / KY. (yb) Yum! Brands Inc. announced the appointment of Paget Alves to its Board of Directors, effective November 17, 2016. With Alves’s appointment, the Yum! Brands Board will consist of 12 directors, 11 of whom will be independent.
«Paget’s extensive executive management and leadership experience, as well as his background in sales, make him a strong addition to the Yum! Brands Board», said Robert Walter, Non-Executive Chairman of Yum! Brands. «We are thrilled to have Paget join us at this exciting time for the Company, and look forward to benefiting from the insight and expertise he will bring».
Greg Creed, Chief Executive Officer of Yum! Brands said, «We are excited to appoint a director as qualified and talented as Paget who will bring fresh perspectives to the Board as Yum! Brands begins its next chapter and moves forward following the separation of the China business. I look forward to working with him as we execute on our strategic plans to drive growth across all of our brands and deliver value for our shareholders».
Alves, 62, serves on the Boards of Directors of International Game Technology PLC, Ariel Investments LLC and Synchrony Financial. He previously served on the Boards of Directors of GTECH Holdings Corporation and Herman Miller Inc. He served as Chief Sales Officer of Sprint Corporation, from January 2012 to September 2013, after serving as President of the Business Markets Group since 2009. Prior to that, he held various other positions at Sprint. Before joining Sprint in 2003, he served as President and Chief Executive Officer of PointOne Telecommunications Inc., and President and Chief Operating Officer of Centennial Communications. Alves earned a Bachelor of Science degree in Industrial and Labor Relations and a Juris Doctor degree from Cornell University.
Board of Directors Approves Separation of Yum China and Announces Dividend
Yum! Brands Inc. also announced that its Board of Directors has approved the previously announced separation of its China business, now owned by Yum China Holdings Inc. (Yum China), from Yum! Brands, which is currently expected to occur after the close of business on October 31, 2016. Yum China expects to begin trading «regular way» as an independent company beginning November 01, 2016, on the New York Stock Exchange (NYSE) under the ticker symbol «YUMC». Yum! Brands expects «when-issued» trading for both Yum! Brands and Yum China to begin on the NYSE on October 17, 2016, under the symbol «YUM WI» for Yum! Brands and “«YUMC WI» for Yum China.
Yum! Brands also announced an increase in the Company’s dividend.
«We are moving full steam ahead with the separation of Yum China, establishing two powerful, independent and focused growth companies dedicated to building on our brand strengths and unlocking the full value of each business for our shareholders», said Greg Creed, Chief Executive Officer of Yum! Brands. «As one of the world’s largest restaurant companies, Yum! Brands will continue to focus on expanding the presence and performance of KFC, Pizza Hut and Taco Bell as a primarily-franchised business to deliver enhanced value to shareholders».
«This is an exciting time for Yum China as we approach our launch as a new, independent public company», said Micky Pant, Chief Executive Officer of Yum China. «Yum China has a leading position in the Chinese market, and we see tremendous opportunities to leverage our well-recognized brands and decades of experience to drive growth. We are all energized to achieve Yum China’s full potential and create sustained value for shareholders».
Returning Capital to Shareholders
The Yum! Brands Board also declared an increased dividend of 0.51 USD per share, payable on November 04, 2016, to shareholders of record as of the close of business on October 19, 2016. This dividend represents an 11 percent increase from the Company’s previous quarterly dividend of 0.46 USD per share. Since initiating a dividend in 2004, Yum! Brands is one of a select group of S+P 500 companies to annually increase its dividend at a double-digit percentage rate.
Since Yum! Brands announced its intention to separate Yum China, the Company has repurchased approximately 5.1 billion USD in shares at an average price of approximately 80 USD, reducing its share count by approximately 15 percent as of September 23, 2016. Yum! Brands expects to repurchase an additional 1.1 billion USD in shares before the end of 2016 to achieve its previously announced plan to return 6.2 billion USD of capital to shareholders (excluding dividends) in connection with the separation of its China business.
Additional Details on Approval of Yum China Separation
The Yum! Brands Board has approved a distribution of one share of Yum China common stock for each share of Yum! Brands common stock held at the close of business on October 19, 2016, the record date for the distribution. No fractional shares of Yum China common stock will be issued. Instead, the distribution agent will aggregate fractional shares of Yum China common stock and sell the whole shares in the open market. The aggregate net cash proceeds of the sales will be ratably distributed to those shareholders who would otherwise have received fractional shares of Yum China common stock.
Yum! Brands shareholders are not required to take any action to receive the shares of Yum China common stock in the distribution, and they will not be required to surrender or exchange their Yum! Brands shares. Importantly, the number of Yum! Brands shares owned by each shareholder will not change as a result of the distribution.
Yum! Brands intends for the distribution of Yum China common stock to be tax-free for its shareholders, except with respect to any cash received in lieu of fractional shares, and expects to complete the distribution after the close of business on October 31, 2016. The separation and distribution remain subject to the satisfaction or waiver of certain conditions and remains subject to the sole discretion of the Yum! Brands Board.
About Yum! Brands
Yum! Brands Inc., based in Louisville, Kentucky, has nearly 43’000 restaurants in almost 140 countries and territories. Yum! Brands is ranked #218 on the Fortune 500 List with revenues of over 13 billion USD in 2015 and is one of the Aon Hewitt Top Companies for Leaders in North America. The Company’s restaurant brands – KFC, Pizza Hut and Taco Bell – are the global leaders of the chicken, pizza and Mexican-style food categories. Worldwide, the Yum! Brands system opens over six new restaurants per day on average, making it a leader in global retail development.
About Yum China Holdings Inc.
Yum China Holdings Inc. will become a licensee of Yum! Brands in People’s Republic of China. It will have exclusive rights in People’s Republic of China to KFC, China’s leading quick-service restaurant concept, Pizza Hut, the leading casual dining brand, and Taco Bell, which is expanding globally but is not yet in China. It will also own the Little Sheep and East Dawning concepts outright. The new company will be well positioned for growth thanks to its strong competitive position, integration of its brands into Chinese popular culture and consumers’ daily lives, expanding geographic footprint in China and existing operational expertise. It will have a strong capital position and no external debt and expects to continue growing its system sales and profits by adding new restaurants and through growing same-store sales. Yum China has more than 7’200 restaurants in over 1’100 cities in China and generated over 8 billion USD in system sales in 2015. The growth of consumption in China is being fuelled by a new generation of younger consumers who are digitally sophisticated and brand driven. The additional growth of the middle class and urban population in China is expected to create the world’s largest market for restaurant brands, with Yum China poised to be the market leader.
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