A customer waits for take-out food outside a McDonald’s restaurant during the May Day holiday in Beijing, China, May 1, 2022.
VCG | Getty Images
mcdonalds I’m buying carlisle’s The company has increased its stake in its China business, raising minority shareholder ownership from 20% to 48%.
In 2017, the fast food giant sold its restaurant rights in mainland China, Hong Kong and Macau for $2.1 billion. It was part of McDonald’s broader strategy to reduce the number of restaurants it owned and turn over the management of their own stores to franchisees with local market knowledge.
At that time, state-owned investment company CITIC acquired a majority stake, and private equity giant Carlyle acquired a 28% stake. McDonald’s retained 20% of the business.
Financial terms of the deal announced Monday were not disclosed. Subject to regulatory approval, the transaction is expected to close in the first quarter of 2024. Citic still owns a 52% stake in the business.
McDonald’s CEO Chris Kempczinski said in a statement: “Now is the time to capture this growth in demand and benefit even more from the long-term potential of a rapidly growing market. “We think this is the perfect time to simplify the structure.”
Since 2017, McDonald’s has doubled its footprint in China to more than 5,500 locations, making it the second largest market by number of restaurants. The chain aims to increase the number of restaurants to his 10,000 by 2028.
But McDonald’s sales in China have struggled since the coronavirus pandemic began. Sales in the country accounted for about 4% of the chain’s total revenue and were down 3.8% from a year ago, according to FactSet estimates.
During McDonald’s latest earnings call, Kempczinski said that while the chain was attracting customers with its burger promotions, China was dealing with “slowing macroeconomic conditions and historically low consumer sentiment.” It pointed out.
Don’t miss the next story from CNBC PRO.
