McDonald's to acquire Carlyle's stake in its China division

McDonald's will acquire global investment firm Carlyle’s minority ownership stake in a strategic partnership that manages its business in mainland China, Hong Kong and Macau.

Upon completion of the transaction, McDonald's will remain a minority partner while increasing its stake from 20% to 48% ownership. Meanwhile, the China International Trust Investment Corporation (CITIC) Consortium, mainly through its equity affiliate CITIC Capital, will maintain its controlling ownership stake of 52%. 

The deal is contingent upon customary regulatory approvals and is expected to close in the first quarter of 2024.

This comes as the business has generated systemwide sales growth of more than 30% in the market year-to-date since September 2019. Going forward, the partners will continue working together as the brand executes on its "Accelerating the Arches" growth strategy in the market, working to deliver on a commitment to develop and open new restaurants and foster deeper engagement with customers.  

Established by McDonald's in November 2020, the "Accelerating the Arches" growth strategy aimed to deliver across five critical areas, including purpose, mission, values, growth pillars and our foundation of running great restaurants.

Chris Kempczinski, McDonald's president and chief executive officer, said: "Our strategic partnership with CITIC and Carlyle has been extremely successful in growing McDonald's presence in the region since it began. China is now our second largest market; we've doubled our restaurants to more than 5,500 since 2017."

"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," Kempczinski added. 

X.D. Yang, chairman of Carlyle Asia, said: "We very much appreciate the strong partnership we have had with CITIC Capital and McDonald's Corporation. Together, we transformed the business, accelerating its growth profile and revolutionizing its digital marketing and operational capabilities.”

Yichen Zhang, chairman and CEO of CITIC Capital and chairman of McDonald's China, said: "As McDonald's China's controlling shareholder, we are thrilled by McDonald's continued commitment to our long-term partnership and the China market. As we reach towards our goal of 10,000+ restaurants by 2028, we are more confident than ever in our ability to serve the Chinese consumer with McDonald's iconic taste."

Back in April, Bloomberg reported that the Carlyle Group was exploring the possibility of introducing new investors to support its investment in the Chinese operations of McDonald's.

In partnership with Trustar Capital, Carlyle Group was engaged in talks to move its ownership in McDonald's China to a new investment entity. According to a person who was familiar with the matter, this prospective arrangement would offer an opportunity for fresh investors to participate in the business, while also providing current limited partners the choice to either exit or maintain their ownership positions.

Related articles:

McDonald's HK and Baby Shark inspire children to go green with expanded campaign 
McDonald's Singapore launches exclusive Grimace NFTs 
McDonald's to create new spin off restaurant in early 2024