McDonald’s is learned to be selling a controllihng stake in its China business to a business group led by Citic and the deal is worth up to $2.1 billion.
Citic Ltd. is state-owned Chinese conglomerate. Its investment management unit Citic Capital will takeover 52 percent stake of fast-food giant’s China business and 28 percent will be acquired by Washington-based private equity firm The Carlyle Group. The remaining twenty percent will be with McDonald’s itself.
The food chain has over 2,400 restaurants in mainland China and in Hong Kong its existence is with 240 outlets. The China operations are valued at up to $2.1 billion and it employs over 120,000 people.
The deal will offer McDonald’s cash as well as new shares. The agreement is for twenty years.
The deal is currently waiting for the approval of regulations and is believed to be completed by mid-year.
Meanwhile, it is also learned the food giant will be adding up more 1,500 restaurants in China and Hong Kong with the help of its partners in the next five years.
China is a booming market where middle class families have more money to spend on eating out. It is believed the market to continue growing rapidly.