Yum China Holdings has acquired a 5% equity interest in chicken producer Fujian Sunner Development (Sunner).

Headquartered in the Fujian province, Sunner is engaged in chicken breeding and farming, feed processing and meat processing businesses.

The company was founded in 1983 and is said to be the largest white-feathered chicken producer in China.

Yum China CEO Joey Wat said: “We are excited to become a strategic investor in Sunner, our largest poultry supplier. Yum China and Sunner are longstanding business partners. The management team of Sunner has demonstrated exceptional execution capabilities over the years.

“With this strategic investment, we look forward to enhancing Yum China’s supply chain security and deepening our collaborations with Sunner, including in the areas of product development and innovations.”

Sunner founder and chairman Guangming Fu said: “Yum China has long been Sunner’s largest customer and an integral part of our growth since the beginning. Sunner is delighted to welcome Yum China as our strategic investor.”

Yum China is a licensee of Yum! Brands in mainland China. At the end of December, the company had 10,506 restaurants across 1,500 cities in the country.

In a separate development, China’s largest food company COFCO is reportedly planning to merge its international trading division with several domestic businesses.

once the combination completes, Cofco will initiate the IPO process. The IPO can value the new company at more than $5bn, people familiar with the development told Bloomberg.

The company has hired bankers to seek advice on the merger plan.