McDonald’s is set to increase its minority stake in its China business from 20% to 48%. In 2017, the fast food giant sold control of its restaurants in mainland China, Hong Kong and Macau to Carlyle and Citigroup. The deal was part of McDonald’s broader strategy to own fewer restaurants, leaving franchisees with knowledge of local markets to run their locations.

At the time, Citić, a state-owned investment firm, took a majority stake, while private equity Carlyle bought 28 percent of the shares. McDonald’s held 20% of the business. Now, McDonald’s is buying Carlyle’s stake in its China business, increasing its minority stake from 20% to 48% ownership.

Financial terms of the deal announced Monday were not disclosed. The deal is expected to close in the first quarter of 2024, assuming regulatory approval. Citić still retains his 52% stake in the company. “We believe there is no better time to simplify our structure, given the tremendous opportunity to capture increased demand and further leverage the long-term potential of our fastest-growing market,” McDonald’s CEO Chris Kempczynski said in a statement.

As of 2017, McDonald’s had doubled its footprint in China to more than 5,500 restaurants, making it the market’s second largest by number of locations. The chain aims to reach 10,000 restaurants by 2028 but has been struggling due to slowing macroeconomic conditions and historically low consumer sentiment since the start of Covid pandemic. The country accounts for about 4% of McDonald’s total revenue which is down by about -3.8% compared with previous year according to Factset estimates

By Editor

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