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It’s a long way from Louisville to the green pastures of Inner Mongolia. But it looks like Hong Kong-listed Little Sheep – the Chinese hotpot chain and mutton producer – is about to become a full member of the US-based Yum stable, best known for Kentucky Fried Chicken.

With the mooted purchase of Little Sheep, Yum’s reincarnation as an American company with increasingly Chinese characteristics reaches a new stage.

Yum Brands – which also owns the Pizza Hut and Taco Bell marques – reported solid earnings last week, thanks almost entirely to punchy growth in China. Sales there jumped 18 per cent in the quarter, while China made up 54 per cent of operating profits.

It is also the dominant force in China’s booming fast food market. It opens more than one new restaurant there a day, and expects to reach a market share advantage over McDonald’s of 3:1.

Yum already owns almost 30 per cent of Little Sheep – which runs a chain of Mongolian-style hotpot restaurants around China, and has a handful of branches in North America. Bloomberg reported on Tuesday night that the US company will now buy up the rest of Little Sheep, though “no formal offer has yet been made”.

Buying Little Sheep makes plenty of sense. Yum’s transformation into a truly international company requires some local flavours – and owning a truly Asian chain may help it diversify the menu at its existing outlets, which already include such delights as quail egg skewers at Pizza Hut and rice porridge with thousand-year egg at KFC .

Little Sheep is also a meat supplier – its smiling lamb logo can be seen on packaged meat across China – and it was the first organically certified mutton producer in China. It a time of increasing concerns over food safety, buying a food company with such direct control over its supply chain is a major attraction.

And perhaps Little Sheep might become more international too. With five outlets in Canada, and soon-to-be seven in the US, bubbling Mongolian hotpot may be coming to a street corner near you soon.

Related reading:
Street smarts needed to thrive in China, FT
Fast food battle heats up in China, FT
Fast food in China, FT