McDonald’s is expanding its ownership stake in its China business from 20% to 48%, acquiring Carlyle’s share in the joint venture. The fast-food giant sold off control of its restaurants in mainland China, Hong Kong, and Macau in 2017 for $2.1 billion as part of a broader strategy to own fewer restaurants and leave it to franchisees to operate their locations. Financial details of the deal were not disclosed, but it is expected to close in the first quarter of 2024 pending regulatory approval. Citic still retains its 52% stake in the business.
Since then, McDonald’s has doubled its footprint in China to more than 5,500 locations, making it the second-largest market by number of restaurants. The chain aims to reach 10,000 restaurants by 2028. However, sales have struggled since the Covid pandemic began, with China accounting for only about 4% of McDonald’s total revenue, down by 3.8% from the previous year according to Factset estimates. On a recent earnings call, CEO Chris Kempczinski noted that China is facing “slowing macroeconomic conditions and historically low consumer sentiment,” despite promoting its burgers to draw customers in.