McDonald’s will, reportedly, sell its businesses in mainland China and Hong Kong for $2.08 billion to Citic, a state-owned conglomerate, and private equity firm Carlyle Group.
The deal will give Citic and Carlyle franchise rights for 20 years. Citic and its investment arm, Citic Capital, will have a controlling stake of 52%, while Carlyle will take 28%. McDonald’s will retain the remaining fifth of the company.
“China and Hong Kong represent an enormous growth opportunity for McDonald’s. This new partnership will combine one of the world’s most powerful brands and our unparalleled quality standards with partners who have an unmatched understanding of the local markets,” says McDonald’s chief executive Steve Easterbrook who took over in 2015.
Easterbrook set about turning the company around and has seen it regain its financial footing recently, although growth has slowed. The turnaround plan announced involved making 95% of its restaurants franchises, including more than 1,750 in China and Hong Kong. McDonald’s operates and franchises more than 2,400 restaurants in mainland China and more than 240 in Hong Kong.