McDonald’s offloads majority interest in China franchise in $2.1bn deal
McDonald’s has cleared the way to sell off an 80% stake in its Chinese business as part of a concerted effort to franchise more of its international restaurants rather than operate them directly.
The burger chain will cede majority ownership to Chinese government investment group Citic and US private equity firm Carlyle Group, allowing McDonald’s to continue benefitting from sales whilst slashing its operating costs.
At present the fast food giant operates around 65% of 2,000 restaurants spread across China and Hong Kong directly.
When the dust settles on the transaction McDonald’s will be left with a 20% stake in the business with Citic taking 52% and Carlyle holding 28% of the business.
Last March McDonald’s unveiled an ambitious expansion strategy for the region which would see it build an additional 1,500 restaurants in the region over the next five years.