Yum Brands Inc is planning to take its China business and spin if off into its own publicly traded company.
Yum China, the new entity, will become a franchisee of Yum Brands in Mainland China, the company said.
The new company will have exclusive rights to the organization’s various fast food chains which includes KFC, Pizza Hut and Taco Bell.
Yum Brands says it will use the split to focus on expanding the chain’s locations around the world.
Yum Brands will be led by 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.
The split is expected to be tax-free for shareholders and will be completed by the end of 2016.
Yum China currently operates approximately 6,900 restaurants in over 1,000 cities. The company is on track to launch 700 new restaurants in 2015. Yum plans to open 20,000 locations throughout China.
Yum’s shares rose nearly 5.3 percent in premarket trading on Tuesday following news of the split.