U.S. private equity group Carlyle Group Inc. has announced its intention to take over KFC Holdings Japan, the operator of KFC restaurants in the country, for around $835 million (130 billion Japanese yen).
Carlyle will initiate a tender offer for the Tokyo-listed company at 6,500 Japanese yen per share, representing roughly a 20% premium over the stock’s most recent closing price of 5,400 yen. If successful, the acquisition will mark the exit of Mitsubishi Corp., which is backed by Berkshire Hathaway and currently holds a 35% stake in KFC Japan.
KFC Japan has expressed its support for Carlyle's offer, which first appeared in the national business paper Nikkei in April. The tender period will run until July 9 and Carlyle is set to acquire Mitsubishi's stake as soon as September in a transaction estimated to reach $257.6 million (40 billion Japanese yen).
Carlyle’s goal is to broaden KFC Japan's menu by introducing more lunch and afternoon items.
For the fiscal year ending March 2024, KFC Japan reported an 11% increase in group sales to $712.3 million (110.6 billion Japanese yen) and a 62% surge in operating profit to $37.4 million (5.8 billion Japanese yen).
Mitsubishi introduced KFC to Japan in 1970 as a joint venture with the U.S. chain. In 2007, it increased its stake to more 60%, thus becoming the parent company, before reducing its holdings in 2015 as part of its plan to improve capital efficiency.
Carlyle has a notable history in the restaurant sector in Asia. It manages the McDonald's and Dunkin' Donuts chains located in China. In Japan, it took pub style izakaya operator Chimney private and relisted it in 2012.
