McDonald’s has announced that it is increasing its minority stake in its China business from 20% to 48%. The fast-food giant sold control of its restaurants in mainland China, Hong Kong and Macau to Carlyle and Citic in 2017 for $2.1 billion. Since then, McDonald’s has doubled its footprint in China to more than 5,500, making the market its second-largest by number of locations. The chain aims to reach 10,000 restaurants by 2028.
The deal announced Monday will see McDonald’s buy Carlyle’s stake in the business, increasing its ownership from 20% to 48%. Financial terms of the deal were not disclosed. Citic still retains its 52% stake in the business.
“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,” said McDonald’s CEO Chris Kempczinski.
However, McDonald’s sales in China have struggled since the Covid pandemic began. The country accounts for about 4% of the chain’s total revenue, down 3.8% from the year prior, according to Factset estimates. On McDonald’s latest earnings call, Kempczinski noted that China is dealing with “slowing macroeconomic conditions and historically low consumer sentiment.” Despite this, McDonald’s is drawing in customers by promoting its burgers.