McDonald’s is set to increase 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, making it the second-largest market by number of locations.
The sale of control of its restaurants in mainland China, Hong Kong, and Macau was part of a broader strategy by McDonald’s to own fewer restaurants. The company left it up to franchisees with knowledge of local markets to run their own locations. At that time, Citic took the majority stake while private equity giant Carlyle bought a 28% stake. McDonald’s retained a 20% stake in the business.
Now, McDonald’s is buying Carlyle’s stake in its China business, increasing its minority share from 20% to 48%. Financial terms of the deal announced Monday were not disclosed. The deal is expected to close in the first quarter of 2024 if regulators approve it. Citic still retains a majority stake in the business with a 52% share.
Since the sale of control in 2017, McDonald’s has continued to grow its presence in China. However, sales have been affected by Covid-19 pandemic restrictions and slowing macroeconomic conditions along with low consumer sentiment. Despite this setback, McDonald’s aims to reach 10,000 restaurants by 2028 and remains committed to expanding into new markets such as India and Southeast Asia.