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File photo Matthias Schrader AP/Press Association Images

McDonald's sells majority stake in its Chinese restaurants to state-owned company

The deal is part of an international turnaround plan by the Golden Arches as it struggles with sluggish growth in the US.

US FAST-FOOD giant McDonald’s will sell a controlling stake in its Chinese and Hong Kong business for up to $2.08 billion (about €1.9 billion) to a consortium including state-owned Citic and the Carlyle Group, it was announced Monday.

The deal is part of an international turnaround plan by the Golden Arches as it struggles with sluggish growth at home.

Citic Limited, Citic Capital Holdings, Carlyle Group and McDonald’s will form a company that will act as a franchisee for the chain’s business in mainland China and Hong Kong for 20 years, the companies said in a joint statement.

Citic is a vast Chinese state-owned conglomerate with interests in businesses ranging from energy and manufacturing to real estate.

It 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”.

The burger chain last year announced plans to sell its 2,600-plus restaurants in China and Hong Kong, after sales took a hit as tensions in the South China Sea dented US companies’ earnings in the country.

Its Chinese business also suffered a blow in 2014 after a food safety scandal involving one of its meat suppliers.

The deal gives McDonald’s partners “who have an unmatched understanding of the local markets and bring enhanced capabilities”, CEO Steve Easterbrook said in the statement.

Citic and Citic Capital will have a stake of 52%, Carlyle will take 28% and McDonald’s will retain 20% of the new company.

It will focus on growth in China’s smaller regional cities and plans to open more than 1,500 restaurants on the mainland and in Hong Kong over the next five years.

“Citic and Carlyle’s resources will allow McDonald’s to expand rapidly and refurbish old restaurants, which is expensive to do,” Ben Cavender of China Market Research Group told Bloomberg News.

“Given that McDonald’s lags behind KFC in terms of store count in China, we can expect them to expand aggressively and invest heavily.”

Global overhaul

The Illinois-based burger chain has been overhauling its global structure under Easterbrook to compensate for slower growth in markets such as France and the US, its largest market.

The global restructuring plan calls for refranchising 4,000 restaurants by the end of 2018, with the long-term goal of franchising 95% of its outlets.

The new company will focus on menu innovation and enhanced restaurant convenience, and McDonald’s existing management team will continue to lead the business, the statement said.

McDonald’s opened its first restaurant in mainland China in 1990 and currently employs over 120,000 people, it said, adding that the fast-food chain is the country’s second-largest.

It was one of the largest-ever China-based deals for asset manager Carlyle, which has invested more than $7 billion (about €6.6 billion) of equity in the world’s second-largest economy, according to the statement.

The deal is expected to be closed in mid-2017 pending regulatory approval.

Investors appeared to welcome the deal, as shares of Citic Limited closed up 1.24% on the Hong Kong exchange today.

Rival Yum Brands, owner of KFC, Pizza Hut and Taco Bell, last year split off its $6.9 billion (about €6.5 billion) Chinese business into a separate company, Yum China, to focus on its huge but struggling restaurant empire in the country.

© AFP 2017

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    Mute Dan The Man
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    Oct 22nd 2023, 8:49 AM

    And now, lets get onto the important stuff… the lotto. The last lotto I monitored for integrity was very interesting, because the people who ran the lotto, actually won it! So it’s not unusual for that to happen, now and again

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    Mute Shane Doyle
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    Oct 22nd 2023, 9:51 AM

    @Dan The Man: listen Dan most readers do not know but you are well known for pulling your own name from the drum of the local gaa draw the two times you were asked to officiate

    73
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    Mute Colin Howard
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    Oct 22nd 2023, 10:08 AM

    @Dan The Man: and the guy that won it didn’t know he’d won it cause he was holding the ticket upside down!! Number 11 I think, was the winning number!!

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    Mute Paul Moloney
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    Oct 22nd 2023, 6:53 PM

    @Shane Doyle: the dirty dog

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    Mute Dvsespaña
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    Oct 22nd 2023, 9:01 AM

    It might make for an awkward TV viewing experience, but maintaining public faith in the integrity of all the draws, would be better served by continuing the live broadcast with any technical difficulties included.

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    Mute Mary Toilet
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    Oct 22nd 2023, 8:37 AM

    Bertie Ahern won it

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    Mute Dman
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    Oct 22nd 2023, 8:46 AM

    @Mary Toilet: RTE CFO won it

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    Mute Mojo Jubjub
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    Oct 22nd 2023, 8:56 AM

    @Dman: YAWN…….

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    Mute Dman
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    Oct 22nd 2023, 9:16 AM

    @Mojo Jubjub: Yawn Yawn!!

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    Mute Patrick MC Dermott
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    Oct 22nd 2023, 10:10 AM

    @Dman: Are you all out of original ideas this morning?

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    Mute Dman
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    Oct 22nd 2023, 10:15 AM

    @Patrick MC Dermott: I am. Please don’t hold it against me. I’m really sound once you get to know me.

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    Mute Mr Inbetween
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    Oct 22nd 2023, 2:42 PM

    @Mary Toilet: He did the lotto in the bookies, won a few 5 number accumulators, clever guy, hid the cash under the strawberry patch, got paid in cash, bought shares in ‘Meanies’ crips and sold at the right time. Who needs a bank account.

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    Mute Mary Toilet
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    Oct 22nd 2023, 5:15 PM

    @Dman: why be boring? It makes no sense

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    Mute Willie Marty
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    Oct 23rd 2023, 3:18 AM

    @Mary Toilet: is it still resting in his account

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    Mute Davy
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    Oct 22nd 2023, 9:15 AM

    As for slight of hand by FFG on tax increases with comments closed, seems the journal has lost all dignity too

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    Mute Alison Hughes
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    Oct 22nd 2023, 10:19 AM

    @Davy: This seems to upset you a lot.
    Do you have a need to tell others you opinion?
    Is validation or the approval of strangers something important to you?

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    Mute R B
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    Oct 22nd 2023, 10:30 AM

    @Alison Hughes: I would imagine it’s more of the fact that it was an exceptional site for debate up until quite recently and people enjoyed the debates in general. 90% were done with a degree of respect to opposing views and it was a an opportunity to get a sense of public support on topics.
    I am a rare poster but I enjoyed the discussions and back and forth. And despite a small minority of completely entrenched views it was nice to see at times people coming around to understanding at least parts of other viewpoints! If your argument is the correct one it could clearly be won without silencing opposition which only drives fringe elements beliefs. Put it out there.

    I for one miss that aspect of the site which seems now to only want one consensus view that aligns with there articles.

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    Mute Alison Hughes
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    Oct 22nd 2023, 10:59 AM

    @R B: From a casual observer’s perspective, the comment section can be broken down into 3 groups;
    1) the people that have a need for their opinions to be heard…a sort of validation, if you will.
    2) those that feel the “establishment” are conspiring against them and post in the comments section as nobody anywhere else would listen to them.
    3) those that feel they know better than those appointed to positions of responsibility, e.g. those that feel able to say our Taoiseach is this, that or the other when they themselves come nowhere near having achieved any level of success.(This group is the most humorous as they remind me of a security guard on the gate of Microsoft who thinks they run the company!)

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    Mute R B
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    Oct 22nd 2023, 11:29 AM

    @Alison Hughes: which group are you in ?? :)

    All jokes aside I think you have about 25% there and I agree with elements of what you say but at least some of them have to right about something’s so we can’t just decide we are right and they shouldn’t be heard is the key point imo. Let ppl have there say it doesn’t affect us. Debate if you want ignore if you want but let them speak.

    I did chuckle at the security guard comparison. Life would be boring if we all taught in same way. And it’s differing opinions and debate that leads to innovation.

    Today is day be out in sun. Hope you have great day

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    Mute Alison Hughes
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    Oct 22nd 2023, 11:46 AM

    @R B: I agree with you 100% and you hit the nail on the head saying life would be boring if we all thought the same…It’s the sense of “injustice” that many feel when they can’t comment on an online article that makes me laugh!
    They are like toddlers screaming to be heard!
    The sun is indeed out and you’re right about being out in it!
    Have a great day too!

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    Mute MTB Mayo
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    Oct 22nd 2023, 12:52 PM

    @Davy: Haha! …and the Shinners won’t put taxes up!?? Hahahaha

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    Mute Mr Inbetween
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    Oct 22nd 2023, 2:14 PM

    @R B & Alison: Agree with you both. Spot on.

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    Mute Joe Kelly
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    Oct 22nd 2023, 4:36 PM

    @MTB Mayo: what have SF to do with the lotto

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    Mute Tom Harpur Meditation
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    Oct 22nd 2023, 9:29 AM

    Brendan Howlin won the lotto many years ago when he was responsible for flogging it off to premier lotteries

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    Mute Davy
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    Oct 22nd 2023, 9:14 AM

    No winner .
    Lol.
    Need your head examined to play this..

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    Mute Alison Hughes
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    Oct 22nd 2023, 11:01 AM

    @Davy: that would be your expert opinion, would it?

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    Mute Patrick MC Dermott
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    Oct 22nd 2023, 10:19 AM

    My only issue with the integrity of the Lotto, is that all the profits are funding foreign investors. The Lotto boasts that it contributes four million Euro every week towards Irish causes. I’d love to see evidence of that! It also shows the problem we have with gambling in this country. – How much is given towards rehabilitation of gambling addicts I wonder? Integrity, my ass!

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    Mute aidan martin
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    Oct 22nd 2023, 10:49 AM

    Surprised comments are even open for this one

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    Mute JP
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    Oct 22nd 2023, 11:05 AM

    RTE and trust. Never to be the same again. That bastion of truth the bbc has been steadily losing its credibility too. Where will ordinary Joe and Joan go to for their world view ?

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    Mute John finn
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    Oct 22nd 2023, 11:39 AM

    Reminds me of Father Ted.

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    Mute MTB Mayo
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    Oct 22nd 2023, 12:50 PM

    “Number 11, number 11, …what’s that Dougal, you are the winner?” “Ah sorry Ted, I was looking at the ticket upside down”

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    Mute MTB Mayo
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    Oct 22nd 2023, 12:49 PM

    “The money was just ‘resting’ in my account. Did an RTÉ staff member win it?

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    Mute Alan Smith
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    Oct 22nd 2023, 3:43 PM

    The draw is not done live its pre-recorded… what are they at?

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    Mute The Gate Florist
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    Oct 22nd 2023, 8:57 AM

    Even been drawing twice I could win a washer

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    Mute Alison Hughes
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    Oct 22nd 2023, 10:08 AM

    @The Gate Florist: What???

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    Mute Chris Finch
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    Oct 22nd 2023, 10:15 AM

    @Alison Hughes: I was going to tell a joke about washing machines, but it was too dirty.

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    Mute Jimmy
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    Oct 22nd 2023, 8:42 AM

    Ah yep.

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    Mute Jb Walshe
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    Oct 22nd 2023, 4:26 PM

    One of the greatest scams of all times

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    Mute Joe Kelly
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    Oct 22nd 2023, 4:41 PM

    @Jb Walshe: another know all expert. I suppose you have proof of this.

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    Mute Gest 1
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    Oct 22nd 2023, 5:24 PM

    So do we get a refund?

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    Mute JJ Dolan
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    Oct 22nd 2023, 1:29 PM

    Number 11 …

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    Mute Mary Toilet
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    Oct 22nd 2023, 5:13 PM

    Colm O Gorman loves any balls

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    Mute Simon Sterne
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    Oct 22nd 2023, 6:09 PM

    @Mary Toilet: considering the man was sexualy abused and raped by men, that’s a particularly horrific comment

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    Mute Stephen Moroney
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    Oct 23rd 2023, 1:08 AM

    So was the draw Void ? Or is it allowed to stand ? Serious question. As it is a visual draw !!

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