Yum China Holdings, a leading Chinese restaurant company, announced on Thursday it will acquire a controlling interest in the Beijing-based Huang Ji Huang group to expand its Chinese dining business.

The transaction is expected to close in early 2020 under a definitive agreement between the two sides, subjective to the satisfaction of closing conditions and regulatory approvals, the company said in a public statement.

Founded in 2004, Huang Ji Huang group has set up over 640 restaurants at home and abroad.

By adding Huang Ji Huang, Yum China aims to "gain a stronger foothold and enhanced knowhow in the Chinese dining space, which represents a significant share of the dining market in China," the statement said.

Yum China is the largest restaurant company in China, with over 8,700 restaurants in more than 1,300 cities as of June 30, said the company.

It has exclusive rights in the Chinese mainland to KFC, Pizza Hut and and Taco Bell. Yum China also owns Little Sheep, East Dawning and COFFii & JOY concepts outright.

Listed in the New York Stock Exchange on Nov. 1, 2016, the company has been one of the top 10 stocks by weight in the S&P U.S. Listed China 50 index.

The index is designed to track the performance of the 50 largest Chinese companies listed on U.S. exchanges by total market capitalization.

Shares of Yum China dropped 2.45 percent to settle at 44.11 U.S. dollars on Thursday. As of market close, the company was valued at over 16.6 billion dollars in market capitalization.

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