McDonald鈥檚 China finalizes sale of majority stake
Print Edition
McDonald鈥檚 China said yesterday it has completed the transaction to sell the majority of its stake to form a company to run all McDonald鈥檚 outlets on the mainland and Hong Kong.
It will also push forward store openings on the mainland, seeking to open 500 stores a year in the next five years, double the current pace.
CITIC and CITIC Capital has a controlling stake of 52 percent in the new company, while Carlyle and McDonald鈥檚 will have 28 percent and 20 percent interests respectively.
The three parties will designate board members and the current management team will be unchanged.
鈥淭he partnership will strengthen McDonald鈥檚 China鈥檚 entrepreneurial spirit, driven by ownership at the local level. It will also help us ensure first-class customer service and food safety while accelerating our growth in the Chinese mainland and Hong Kong,鈥 said Zhang Yichen, chairman of the new entity.
McDonald鈥檚 China鈥檚 vice president Regina Hui told a press briefing yesterday that the company would focus on leveraging CITIC鈥檚 rich resources in the property sector to drive business synergy.
By 2020, about 45 percent of McDonald鈥檚 estimated 4,500 restaurants in China will be located in third and fourth-tier cities and will have a presence in 300 lower tier cities.
Currently about 35 percent of the existing 2,500 stores are in third or fourth-tier cities.
Hong Kong and the mainland will be McDonald鈥檚 innovation hubs as the company seeks to strengthen its brand leadership by offering digital retail experience as well as localized menu items.
The sale to the new McDonald鈥檚 China franchisee is valued at US$1.6 billion, which includes McDonald鈥檚 existing businesses on both the mainland and Hong Kong.
The pace of China鈥檚 overall fast food market growth has been declining since 2012 and is expected to grow 6.7 percent to 962.5 billion yuan (US$143.5 billion) by the end of this year, down from an average of 8 percent growth rate over the past three years.
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