The Carlyle Group, an American private equity firm, is currently in talks to purchase Mitsubishi‘s 35% ownership stake in KFC Holdings Japan, which oversees the operation of the Kentucky Fried Chicken brand within the country.
Mitsubishi is in the advanced stages of a deal for its shares, anticipated to be concluded by the end of next month.
Carlyle plans to privatize KFC Japan thereafter.
Japanese restaurant operator Colowide and other interested parties participated in the bidding process, but Mitsubishi opted to move forward with Carlyle.
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If Carlyle finalizes the deal, it is anticipated to initiate a takeover bid for the remaining shares.
This development comes after Mitsubishi’s announcement in February 2024 of its intention to divest its 35% equity stake in KFC Holdings Japan, as part of a strategic reshuffle of assets aimed at strengthening its earnings capacity.
The sale is expected to yield tens of billions of yen.
KFC Japan’s roots can be traced back to 1970 when it was established as a joint venture between the then-US-based KFC Corporation and Mitsubishi. Mitsubishi took over as the parent company in 2007 but reduced its ownership to 35% in 2015.
Yum! Brands, the owner of the KFC brand, and KFC Japan have no financial ties. Their franchise chain agreement permits them to utilize the same brand and certain products.
As a result of the agreement with Yum!, KFC Japan’s operations are limited to Japan.
As of December 2023, KFC Japan operates 1,230 outlets, approximately 40% of the total number of McDonald’s outlets in Japan, with only a 5% increase over the past decade.
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