McDonald’s, the global fast-food giant, announced on Monday its plans to further expand its ownership stake in its Chinese operations. In an effort to continue growing in the world’s second-largest economy, McDonald’s will acquire the minority shareholder Carlyle Group, increasing its stake in its Chinese business from 20% to 48%.
Carlyle Group initially acquired its stake in McDonald’s in 2017 when the company sold its operations in mainland China and Hong Kong to a locally led consortium for $2.1 billion. Following the deal, CITIC Capital, an investment management company, became the majority owner of the Chinese business with a 52% stake. The upcoming transaction will not affect CITIC Capital’s ownership.
With China now being McDonald’s second-largest market, the company has experienced impressive growth. Since 2017, the number of McDonald’s restaurants in China has doubled to over 5,550, contributing to a significant sales increase of more than 30% year-to-date since September 2019.
Looking ahead, McDonald’s has ambitious plans to open 10,000 stores in China by 2028. CEO Chris Kempczinski expressed his confidence in this expansion, stating, “We believe there is no better time to simplify our structure, given the tremendous opportunity to capture increased demand and further benefit from our fastest-growing market’s long-term potential.”
The deal is projected to be finalized in the first quarter of 2024, pending regulatory approvals. In response to the announcement, McDonald’s stock rose by 0.3% to $276.55 during early trading, while the S&P 500 experienced a slight decline of 0.2%.