McDonald’s Boosts Investment in Chinese Operations with Enhanced Minority Ownership Stake

McDonald’s Boosts Investment in Chinese Operations with Enhanced Minority Ownership Stake

On May Day holiday in Beijing, China, customers eagerly waited outside a McDonald’s restaurant for their takeout food. The fast-food giant McDonald’s is set to increase its minority share in its China business from 20% to 48% by purchasing Carlyle’s stake. In 2017, McDonald’s sold off control of its restaurants in mainland China, Hong Kong, and Macao for $2.1 billion in an effort to own fewer restaurants and let franchisees with local market knowledge run their own locations. At that time, a state-owned investment firm, Citic, took the majority stake, while private equity giant Carlyle purchased a 28% stake. McDonald’s retained a 20% ownership of the business.

The financial terms of the deal have not been disclosed yet but are expected to close in the first quarter of 2024 pending regulatory approval. Citic still maintains a 52% stake in the business. According to CEO Chris Kempczinski, McDonald’s believes this is the perfect time to simplify its structure and take advantage of the incredible opportunity to capture increased demand and benefit from the long-term potential of its fastest-growing market. Since 2017, McDonald’s has expanded its presence in China to over 5,500 locations making it its second-largest market by number of restaurants. The company aims to increase the number of restaurants to 10,000 by 2028 but sales in China have struggled since the Covid pandemic started. Despite this challenge, Kempczinski stated that “China accounts for about

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