Yum Brands said it intends to separate its China business into a publicly traded company, bowing to pressure from an activist shareholder.
Yum's shares rose more than 6 percent in premarket trading on Tuesday. (Get the latest quote here.)
Yum China, the new entity, will become a franchise of Yum Brands in Mainland China and will pay a percentage of its sales to the parent company for exclusive rights to three of the company's brands - KFC, Pizza Hut and Taco Bell.
Yum Brands will be led by its current Chief Executive Greg Creed and Yum China will be led by Micky Pant, who was named the CEO of the China business in August.