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(Reuters) - Yum Brands Inc (YUM.N), owner of Pizza Hut, KFC and Taco Bell chains, said on Tuesday it expects to return as much as $13.5 billion (10.97 billion pounds) to shareholders by 2019 as part of a programme started last year, sending shares up as much as 3.8 percent.
Yum said it will increase franchise restaurant ownership to 93 percent from the current 77 percent when its China business is spun off on Oct. 31.
The company aims to be least 98 percent franchised by the end of 2018. Shifting to independent owners will enable Yum to reduce risk and lower costs and move to a greater dependence on more stable franchise and license fees.
The company said it had bought back about $5.5 billion of its shares as a part of a previously announced $6.2 billion capital return programme, reducing its share count by about 16 percent.
Yum also said it would expand the plan, resulting in a total return of $13.5 billion to shareholders, including dividends.
The company said it will reduce annual capital expenditure to about $100 million in 2019 from about $500 million in 2015 and plans to reduce general and administrative expenses by a cumulative $300 million by fiscal 2019.
Yum's China business will begin trading on Nov. 1 on the New York Stock Exchange with the ticker symbol YUMC. The new company, Yum China Holdings Inc, will become a licensee of Yum Brands in mainland China and will have exclusive rights to KFC, Pizza Hut and Taco Bell.
Yum last week reported its first same-store sales drop in five quarters in China, blaming anti-U.S. protests after an international court rejected China's claim to historic rights in the South China Sea.
Shares in Yum were up 2 percent at $89.15 after hitting a session high of $90.68. Up to Monday's close, the stock had risen about 20 percent since the start of the year.
Reporting by Siddharth Cavale and Abhijith Ganapavaram in Bengaluru; Editing by Ted Kerr and Jeffrey Benkoe