In an effort to expand into China, McDonald’s has given up their majority share in their company to a major a Chinese financial company.
Along with The Carlyle Group, Citic will be purchasing a majority stake in the fast food giant for approximately $2 billion. In fact, at the end of the day McDonald’s will only hold retain 20% of their business in China.
The fast food giant’s CEO Steve Easterbrook explained that the new partnership would allow for the home of the Big Mac to better understand the food industry in China.
In fact, the company will use this new partnership to add over 1,500 in China in the next few years.
“China and Hong Kong represent an enormous growth opportunity for McDonald’s,” Easterbrook explained. “This new partnership will combine one of the world’s most powerful brands and our unparalleled quality standards with partners who have an unmatched understanding of the local markets and bring enhanced capabilities and new partnerships, all with a proven record of success”
The CEO of McDonald’s added, “By working together, we will unlock even faster growth and be closer to the customers and communities we serve as McDonald’s works to be the leading Quick Service Restaurant across the Chinese mainland and Hong Kong.”
At the end of the day, CITIC and CITIC Capital will own a 52% share in the company. While, The Carlyle Group will own 28% of the fast food giant in China. The remaining 20% stake will be held by the fast food giant.
The fast food giant sees the large working population, growing middle class, and increasing disposable income in China as an investment opportunity for the company.
It is important to note that this deal is not set in stone and is still subject to regulatory approvals. However, McDonald’s believes that the deal will close in the next few months.
McDonald’s is currently changing the way the company handles business. Late last year, the company partnered with UberEats to provide delivery service in Orlando, Miami, and Tampa. The company explained that they plan on providing worldwide delivery service by 2018.