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China extends review of Yum! Brands' bid for Little Sheep

October 25, 2011

China's commerce ministry has added a 60-day extension to its anti-trust review of Yum! Brands Inc.'s bid to buy out Little Sheep Group Ltd.

Yum!'s application for the hot-pot restaurant chain was originally submitted in late June. The review will now expire on Dec. 24.

In approving such takeovers, the Chinese regulating body usually has 30 days to make a decision, according to Little Sheep. If the regulator believes an anti-trust filing warrants further review, the deadline could be extended another 90 days.

The regulator could then further extend the review by 60 more days, if necessary. The review process now stands at this stage, the company said. It is unknown at this time if the review process could be extended even further.

Louisville, Ky.-based Yum! Brands, parent company of Taco Bell, KFC and Pizza Hut, first announced plans to buy Little Sheep in April and take the Hong Kong-listed company private. The deal valued the Chinese firm at $860 million-plus.

Little Sheep had 458 company-owned and franchised restaurants across China as of the end of 2010 and another 22 overseas. It specializes in Mongolian hot pot, in which customers dip meat and vegetables into communal broth.

Yum bought a 20 percent stake in Little Sheep in 2009 and increased its stake to 27.2 percent last year.

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