What is Yum's acquisition of Little Sheep who is the final winner?

Little Sheep Group Co., Ltd. announced on the official website on November 8 that the Chinese Ministry of Commerce had approved Yum! Group’s antitrust approval for the full acquisition of Little Sheep. Yum! Brands also announced that on November 7th, the Ministry of Commerce of the People's Republic of China passed the anti-monopoly review of the “People’s Republic of China Anti-Monopoly Law” and was approved to acquire and privatize Little Sheep.

In May this year, Yum announced that it plans to acquire 93% of Little Sheep at a price of HK$6.50 per share. As soon as this news was announced, it was stirred up. One is the international catering giant, and the other is the “first share of the Chinese hot pot.” In this acquisition, who is the last “winning” guest?

Fulfilling Chinese and Western Food, Yum! Says China's Sincerity Yum! is the world's largest food and beverage group, with more than 38,000 restaurants and more than 1 million employees in more than 110 cities around the world. Its turnover exceeds RMB 100 billion. Its subsidiaries include KFC, Pizza Hut and five other world-famous food and beverage brands, ranking first in the world in the areas of chicken, pizza, Mexican food and seafood chain restaurants. In China, according to data from the Ministry of Commerce, Yum's restaurants number more than 3,000, and its turnover in 2010 reached 33.6 billion yuan. The number of restaurants of Little Sheep in the Chinese mainland market is nearly 500. In 2010, the turnover was nearly 2 billion yuan.

Judging from the layout of the industry chain, Yum! has always wanted to develop Chinese-style catering, and established the Oriental and Chinese white fast food brands. However, from the current perspective, the development rate is relatively slow and does not match the status of the giants in the industry. With the acquisition of Little Sheep, a well-known chain restaurant brand, Yum!’s business in China will be able to “western” and “Chinese” to better explore China’s huge and rapidly developing market. By entering the Chinese-style restaurant industry through Little Sheep, it can be said to be a win-win game and become a "winning" guest.

By borrowing a boat to open up the new world, Little Sheep's dream in the world is in modern business practices. The ultimate outcome of the game is often not the outcome we usually see. In this acquisition, Little Sheep also has a small capital to become a "winning" guest in the game with Yum.

Since Yum has always wanted to develop Chinese-style catering, Little Sheep is a strategic fulcrum for its business expansion, which means that Little Sheep, the national brand, will not only be abandoned, but will be strongly supported. This was confirmed in the announcement of the agreement signed by Yum! to acquire Little Sheep. In the announcement, after Yum's commitment to privatization was implemented, Mr. Zhang Gang, the founder, Chairman of the Board of Directors, and Mr. Chen Hongkai, a non-executive director of Little Sheep, will continue to be the shareholders of Little Sheep and focus on the development of the company. Mr. Zhang Gang will participate as the founding chairman of the Little Sheep brand. Corporate management.

With a solid foundation, Little Sheep can “borrow a boat to the sea”. With the help of Yum's global business network and brand operation experience, Little Sheep can be better penetrated into overseas markets and go global. In this process, Little Sheep can get money from Yum! Support, without the need to withstand the volatility of the capital market, does not need to face the demands of shareholders for the performance of short-term performance and cause confusion.

As Zhang Xiaogang, Chairman of Little Sheep's Board of Directors, said: “On the one hand, capital market volatility can be avoided and necessary funds can be obtained. On the other hand, Yum! Win can also provide Little Sheep's continuous learning opportunities and platforms for the world to benefit from each other.”

With better catering and better services, consumer interests will surely win or lose. Whether it is Yum!’s greater profitability or Little Sheep’s benefits in terms of business interests, it is not the most important. Most importantly, can consumers get better food service after this purchase?

In terms of food safety protection, many franchisees of Chinese-style restaurants do not implement the requirements of the main store is a relatively common disease, a variety of health, product quality problems occur frequently. In standardized management franchise stores, Yum Yuen has its own unique experience and successful practice. After the Chinese restaurant chain joins the Yum family, it will be more strict in terms of standardization management, and it will be better protected both in terms of food safety and employee service. Moreover, this is also a guarantee for the sustainable development and long-term benefits of franchise stores.

In terms of innovation in food development, consumers have a clear feeling that KFC and Pizza Hut have consistently launched new products. However, on the other hand, China’s catering chain is much slower and slower in this respect. In a hot pot restaurant, once there was an old customer sigh: "Today, we basically eat the old dishes more than a decade ago." After Little Sheep entered the Yum! family, if there were no accidents, the new food (food) products were developed. Innovations should be at the forefront of Chinese food and beverage.

Consumers have to get the world, only to allow consumers to become the last "bust-off", companies have the root cause of long-term development.