YUM and Little Sheep – A Sweet Match If China Approves 美国百胜购小肥羊：甜蜜姻缘还靠中国政府成全

By newsdoug on April 27, 2011

I love the imagery associated with the latest blockbuster deal on China’s fast food scene, which would see YUM brands (NYSE: YUM), operator of KFC and Pizza Hut restaurants, swallow up Little Sheep (HKEx: 968), China’s leading hot pot chain. (company announcement; English article; Chinese article) YUM is already well acquainted with Little Sheep, owning 27 percent of the Hong Kong-listed company. Its purchase of most of the remaining stake could make the total deal a sizable one, worth up to $500 million based on Little Sheep’s latest market cap. A purchase by YUM, whose KFC is already China’s largest fast food chain, could do wonders for Little Sheep, helping it boost its already strong position at home and even potentially taking it abroad in markets ... courts a Little Sheep in China like Taiwan, Japan and South Korea, where hot pots are also popular. The big potential obstacle in all this is China’s regulator, which has shown an increasing tendency to use its anti-trust powers as a political tool, as it did two years ago when it vetoed Coke’s (NYSE: KU) proposed purchase of leading chinese juice maker Huiyuan (HKEx: 1886). If the regulator is smart, it will approve this deal and ignore any nationalistic sentiment, or risk further damaging its reputation as an objective and impartial anti-trust body.

Bottom line: China needs to approve YUM’s purchase of Little Sheep to improve its reputation, a move that could propel the Chinese hot pot chain to a domestic and even regional powerhouse.

近日媒体报美国百胜集团<YUM.N>将收购中国火锅连锁小肥羊<0968.HK>，这样的甜蜜姻缘我个人非常喜欢。百胜对小肥羊绝非陌生，它已拥有後者27%股权。百胜购小肥羊多数剩余股权，该交易规模较为可观，基於小肥羊目前市场，大约相当於5亿美元。如果收购成功，小肥羊有望壮大国内市场影响力，触角甚至有望伸向台湾、日本与韩国等地市场。牵手的最大潜在障碍在於中国监管机构。两年前可口可乐提议收购汇源果汁，就遭中国监管机构否决。中国监管机构如头脑灵活的话，就该放行交易，忽略任何民族品牌情绪，否则其客观与公正名声会进一步受损。

一句话：中国从名声考虑应批准百胜购小肥羊，而小肥羊也有希望成为国内，甚至地区性火锅连锁大品牌。

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