McDonald’s is increasing its stake in its China business to 48% ownership, buying out Carlyle’s minority share. The fast-food giant sold off control of its restaurants in mainland China, Hong Kong and Macau in 2017 for $2.1 billion. Since then, the chain has doubled its footprint in China to over 5,500 locations, making it the second-largest market by number of restaurants. Financial terms of the deal were not disclosed, but it is expected to close in the first quarter of 2024 pending regulatory approval.
“We believe there is no better time to simplify our structure,” said McDonald’s CEO Chris Kempczinski. “The tremendous opportunity to capture increased demand and further benefit from our fastest growing market’s long-term potential.” The company aims to reach 10,000 restaurants by 2028.
However, McDonald’s sales in China have struggled since the Covid pandemic began. The country accounts for about 4% of the chain’s total revenue, down 3.8% from the year prior according to Factset estimates. On their latest earnings call, Kempczinski noted that China is dealing with “slowing macroeconomic conditions and historically low consumer sentiment.” Despite this challenge, the chain is drawing in customers by promoting its burgers.