McDonald’s is increasing its minority share ownership 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 Citic. Since then, McDonald’s has doubled its footprint in China to more than 5,500 locations. The chain aims to reach 10,000 restaurants by 2028. However, sales have struggled since the Covid pandemic began with the country accounting for about 4% of the chain’s total revenue.
The fast-food giant sold off control of its restaurants in mainland China, Hong Kong, and Macau in 2017 for $2.1 billion as part of a broader strategy to own fewer restaurants. At that time, Citic took the majority stake while private equity giant Carlyle bought a 28% stake. McDonald’s held onto 20% of the business. Financial terms of the deal announced Monday were not disclosed but it is expected to close in the first quarter of 2024 with regulators approval.
McDonald’s CEO Chris Kempczinski stated that they believe there is no better time to simplify their structure given “the tremendous opportunity to capture increased demand and further benefit from our fastest growing market’s long-term potential.” Despite struggles due to Covid-19 pandemic slowing macroeconomic conditions and historically low consumer sentiment