Monday, January 09, 2017

McDonald''s sells 80% of operation in China to State and Carlyle

Beijing-McDonald''s announced that it has closed a deal to sell a controlling share in its operations in China to a group of investors led by Citic, a Chinese State.
The Citic Capital Holdings and the private equity fund Carlyle Group will buy an 80 percent stake in McDonald''s Chinese assets in a transaction estimated at up to $2.08 billion. The agreement will last for 20 years.
The Citic Capital, which is the financial arm of the conglomerate, will take a majority share of 52% and the Carlyle, with participation of 28%.
McDonald''s has about 2,200 stores in China, about one-third of which under franchise agreement. Under the agreement, all remaining units will be franchised and McDonald''s will keep them a share of 20%. The deal should help the network of American diners to reduce operational costs and preserve capital.
In recent years, McDonald''s has had difficulty increasing sales in China, where the network is the second largest fast food chain, behind Yum China Holdings, which has over 5,000 KFC restaurants and almost 2,000 units of the Pizza Hut in the Asian country.
Sales of McDonald''s stores in China decreased after problems with a supplier have caused lack of burgers and chicken meat in some restaurants in 2014, according to information disclosed during the company''s Conference calls.
Exame News Item translated automatically
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