US Carlyle takes KFC Japan in $835m buyout

US private equity giant Carlyle Group plans to acquire KFC Holdings Japan for 130 billion yen ($835 million), the Nikkei Asia reported on Monday. This deal will take KFC Japan private and signal the departure of long-time investor Mitsubishi Corp.

Carlyle plans to make a tender offer for KFC Holdings Japan shares at 6,500 yen each, a 20 per cent premium over Monday’s closing price. KFC Japan has endorsed this offer in a statement released on Monday.

Mitsubishi Corp., a Japanese trading house supported by Berkshire Hathaway, will sell its 35 per cent stake in KFC Japan as part of an asset review to enhance capital efficiency.

The tender offer period will end on July 9th, and Carlyle is set to purchase Mitsubishi’s stake in September for around 40 billion yen. Carlyle intends to enhance KFC Japan’s menu to attract a broader customer base, with a focus on lunch and afternoon options.

This expansion strategy aims to capitalise on KFC Japan’s recent growth, with group sales and operating profit increasing by 11 per cent and 62 per cent respectively in the fiscal year ending March 2024.

The group has prior experience in the restaurant industry, managing McDonald’s and Dunkin’ Donuts franchises in China. In Japan, the firm acquired and relisted Japanese pub chain Chimney in 2012.