Yum’s Incoming CEO Eyes Acquisitions, Strategic Investments

(Bloomberg) -- Yum! Brands Inc., which has more than 48,000 restaurants globally across its brands, is looking to grow some more.

The owner of KFC and Taco Bell will consider partnerships, strategic investments and even adding another restaurant chain, incoming Chief Executive Officer David Gibbs said in an interview on Monday.

“It would have to be a brand with lots of growth ahead of it, and well received by consumers,” he said when asked what kind of a target Yum would be looking for.

The next growth phase for the company will involve “leveraging our scale, whether that be through investments or commercial partnerships,” said Gibbs, 55. On Monday, the company announced Gibbs will take over as CEO starting Jan. 1. Greg Creed, 62, who’s held the top post since 2015, is retiring to spend more time with family.

Yum Brands, which is 98% franchised, is being fueled by growth at its Taco Bell and KFC chains, while still struggling to improve results at Pizza Hut -- a brand that Gibbs will seek to turn around. Yum’s comparable sales jumped 5% last quarter with Taco Bell, which is mostly a U.S. brand, leading the way.

The company in 2018 spent $200 million for a stake in delivery provider GrubHub Inc. McDonald’s Corp. has also been active with acquisitions this year, with its $300 million purchase of decision-logic technology company Dynamic Yield Ltd.

Gibbs, who currently serves as chief operating officer, will transition to become CEO as Yum shares have hit historic highs in recent sessions. The stock has risen 41% in the last 12 months, compared with a gain of only 1.8% for the S&P 500 Index.

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editors responsible for this story: Anne Riley Moffat at ariley17@bloomberg.net, Jonathan Roeder

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