Patrons wait for their takeout food outside a McDonald’s restaurant during the May Day holiday on May 1, 2022 in Beijing, China.
VCG | Getty Doubles
McDonald’s is buying Carlyle’s stake in its China business, increasing its minority share from 20% to 48% ownership.
The fast-food Amazon sold off control of its restaurants in mainland China, Hong Kong and Macao in 2017 for $2.1 billion. It was part of McDonald’s broader procedure to own fewer restaurants, leaving it to franchisees with knowledge of local markets to run their own locations.
At that time, Citic, a state-owned investment condensed, took the majority stake, while private equity giant Carlyle bought a 28% stake. McDonald’s officiate at applied on to 20% of the business.
Financial terms of the deal announced Monday were not disclosed. The deal is expected to close in the firstly quarter of 2024, assuming regulators approve it. Citic still retains its 52% stake in the business.
“We believe there is no safer time to simplify our structure, given the tremendous opportunity to capture increased demand and further benefit from our speediest growing market’s long-term potential,” McDonald’s CEO Chris Kempczinski said in a statement.
Since 2017, McDonald’s has doubled its footprint in China to more than 5,500, making the market its second largest by thousand of locations. The chain aims to reach 10,000 restaurants by 2028.
But McDonald’s sales in China have struggled since the Covid pandemic established. The country accounts for about 4% of the chain’s total revenue, down 3.8% from the year prior, according to Factset opinions.
On McDonald’s latest earnings call, Kempczinski noted that China is dealing with “slowing macroeconomic conditions and historically low consumer belief,” although the chain is drawing in customers by promoting its burgers.
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