Mayer Brown JSM and Wachtell, Lipton, Rosen & Katz are advising fast-food giant Yum! Brands – the parent company of Pizza Hut, Taco Bell and Kentucky Fried Chicken (KFC) – on its plan to spin off its 6,900-restaurant China operations.

The split, which is expected to conclude by the end of 2016, will result in two separate, publicly traded companies: Yum! China, which poses higher risks but also higher rewards, and Yum! Brands, which is expected to be more stable and yield higher cash flows.

A team from Mayer Brown headed by Chicago partners Frederick Thomas, Jodi Simala, David Schuette and Lee Morlock is handling the transaction.

Yum! is the biggest Western restaurant chain in China. Its China business, which has been plagued by food-safety troubles and marketing woes, accounted for 54 percent of overall operating profit in the latest quarter.

Jonathan Blum, a spokesman for Yum, said the spinoff was the result of a "rigorous, year-long review." The move comes days after Keith Meister, CEO of hedge fund Corvex Management, which owns about 5 percent of Yum!, was appointed to the board of directors. The arrival of Meister, who is known as an activist investor, seems to have served as a catalyst for the spin-off.

Yum! China, which is mostly debt-free, will be headed by China leader Micky Pant and set up headquarters in Shanghai. After the spin-off, it will be a Yum! franchisee in mainland China and pay its parent firm a percentage of its sales for exclusive rights to the Taco Bell, Pizza Hut and KFC brands.