Citic and Carlyle $1.7 billion acquisition of controlling stake in McDonalds

Overview:

• Chinese state-backed conglomerate Citic and US private-equity firm Carlyle Group have acquired a controlling stake in the China and Hong Kong operations of McDonalds for $1.7 billion. 
• The fast-food household name is in the middle of a reorganisation in a market where it’s striving to catch up with more nimble rivals.
• The buyers will acquire an 80% holding in a deal valuing the business at $2.08 billion, while the Oak Brook, Illinois-based McDonald’s will keep the remaining stake; under the agreement, Citic and Citic Capital Partners will jointly take a 52% stake, while Carlyle will hold 28%.
• The new owners plan to add over 1,500 restaurants in the next five years in smaller Chinese cities.
• McDonald’s and rival Yum China Holdings, which operates the KFC and Pizza Hut brands in the mainland, are among retailers that are trying to fend off domestic competition and attract middle-class Chinese consumers who increasingly demand high-quality and healthier dining options.
• As McDonald’s streamlines its sprawling global operations, the fast-food giant is also looking at further deals in markets such as South Korea, Japan and South East Asia.

Adam Majeed - Regional editor