By AFPJanuary 09, 2017Latest : Business
BEIJING: US fast-food giant McDonald´s will sell a controlling stake in its mainland China and Hong Kong franchise business to a consortium of Citic Group and the Carlyle Group for up to $2.08 billion, the companies said Monday.
Citic Limited, Citic Capital Holdings, Carlyle Group and McDonald´s will form a company that will act as the franchisee responsible for the chain´s business in mainland China and Hong Kong for 20 years, the companies said in a joint statement.
Citic and Citic Capital will have a stake of 52 percent, Carlyle will take 28 percent, and McDonald´s will hold 20 percent of the new company.
The burger chain announced its plan to sell its roughly 2,000 restaurants in China last year, after its sales took a hit as tensions in the South China Sea impacted US companies´ results in the country.
Its business in the country also suffered a hit in 2014 after a food safety scandal involving one of its meat suppliers.
The new company will focus on growth in China´s smaller, regional cities, and will plan to open more than 1,500 restaurants in the mainland and Hong Kong over the next five years.
Citic, a vast conglomerate with interests in businesses from energy and manufacturing to real estate, said in a statement to the Hong Kong stock exchange that the purchase would deepen its exposure to China´s consumer sector, "which is poised to be the main driver of China´s economy for decades to come".