McDonald’s Expands Stake in China Business, Eyes Continued Growth
In a strategic move, McDonald’s has announced its acquisition of investment firm Carlyle’s minority stake in the partnership that oversees the chain’s operations in mainland China, Hong Kong, and Macau. This acquisition will increase McDonald’s ownership stake from 20% to 48%, while the CITIC Consortium, through its equity affiliate CITIC Capital, will maintain its controlling ownership stake in the market, owning 52% of the market. This move comes as McDonald’s China business has seen significant growth, with 5,500 stores and systemwide sales increasing by more than 30% year-to-date since September 2019.
CEO Chris Kempczinski expressed confidence in the success of the partnership with CITIC and Carlyle, stating that it has been instrumental in growing McDonald’s presence in the region. With this acquisition, McDonald’s and CITIC will continue to work together to execute the company’s Accelerating the Arches strategy, including the development of new restaurants. The company’s goal is to reach more than 10,000 restaurants by 2028.
This acquisition aligns with McDonald’s broader strategy of simplifying its structure and capitalizing on the tremendous opportunity for increased demand in its fastest growing market. The company’s commitment to its long-term partnership with the China market has been well received, with Yichen Zhang, chairman and CEO of CITIC Capital and chairman of McDonald’s China, expressing excitement about McDonald’s continued commitment.
Notably, this news comes on the heels of McDonald’s creation of the “One McDonald’s Way” strategy, which aims to streamline operations and leverage learnings from each market to drive growth. The company’s Accelerating the Arches 2.0 plan, announced in January, includes organizational restructuring and breaking down segment and market silos.
While McDonald’s has acknowledged a slowing macroeconomic environment and historically low consumer sentiment in China, the company’s stronger investment position is expected to give them a better voice in ensuring the growth they expect in the marketplace occurs. With a focus on continued expansion and development, McDonald’s is poised to capitalize on the long-term potential of its second largest market.
For more information, contact Alicia Kelso at [email protected]
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