McDonald's to Acquire Carlyle's Stake in McDonald's China

Rhea-AI Summary

McDonald's Corporation (MCD) to Increase Stake in China Business, CITIC Consortium to Maintain Control: McDonald's Corporation (NYSE: MCD) and global investment firm Carlyle (NASDAQ: CG) announced that McDonald's will acquire Carlyle's minority ownership stake in the strategic partnership operating its business in mainland China, Hong Kong, and Macau. The CITIC Consortium will maintain its controlling ownership stake, with McDonald's increasing its stake from 20% to 48%. The business has seen over 30% systemwide sales growth in the market year-to-date since September 2019, and the partners will continue to work together to execute the brand's growth strategy in the market.

Positive

• McDonald's increasing its stake in the China business reflects its confidence in the region's growth potential.
• The business has experienced significant systemwide sales growth of over 30% in the market year-to-date since September 2019, indicating strong performance and demand in the region.
• The continuation of the partnership with the CITIC Consortium and Carlyle demonstrates a commitment to further growth and development in the Chinese market.

Negative

• None.

CHICAGO and HONG KONG, Nov. 20, 2023 /PRNewswire/ -- McDonald's Corporation (NYSE: MCD) and global investment firm Carlyle (NASDAQ: CG) today announced that McDonald's has agreed to acquire Carlyle's minority ownership stake in the strategic partnership that operates and manages McDonald's business in mainland China, Hong Kong and Macau.  

The CITIC Consortium, mainly through its equity affiliate CITIC Capital, will maintain its controlling ownership stake. Upon completion of the transaction, the CITIC Consortium will continue to own 52%, and McDonald's will remain a minority partner while increasing its stake from 20% to 48% ownership.  

"Our strategic partnership with CITIC and Carlyle has been extremely successful in growing McDonald's presence in the region since it began. China is now our second largest market; we've doubled our restaurants to more than 5,500 since 2017," said Chris Kempczinski, McDonald's President and Chief Executive Officer. "We believe there is no better time to simplify our structure, given the tremendous opportunity to capture increased demand and further benefit from our fastest growing market's long-term potential." 

The business has generated Systemwide sales growth of more than 30% in the market year-to-date since September 2019. Going forward, the partners will continue working together as the brand executes on its Accelerating the Arches growth strategy in the market, working to deliver on a commitment to develop and open new restaurants and foster deeper engagement with customers.  

"We very much appreciate the strong partnership we have had with CITIC Capital and McDonald's Corporation. Together, we transformed the business, accelerating its growth profile and revolutionizing its digital marketing and operational capabilities," said X.D. Yang, Chairman of Carlyle Asia. "The business has always delivered outstanding results and we wish them every success on their next phase of growth." 

"As McDonald's China's controlling shareholder, we are thrilled by McDonald's Corporation's continued commitment to our long-term partnership and the China market," said Yichen Zhang, Chairman and CEO of CITIC Capital and Chairman of McDonald's China." As we reach towards our goal of 10,000+ restaurants by 2028, we are more confident than ever in our ability to serve the Chinese consumer with McDonald's iconic taste." 

The deal is contingent upon customary regulatory approvals and is expected to close in the first quarter of 2024.  

ABOUT McDONALD'S
McDonald's (NYSE: MCD) is the world's leading global foodservice retailer with over 40,000 locations in over 100 countries. Approximately 95% of McDonald's restaurants worldwide are owned and operated by independent local business owners. 

ABOUT CARLYLE 
Carlyle (NASDAQ: CG) is a global investment firm with deep industry expertise that deploys private capital across three business segments: Global Private Equity, Global Credit and Global Investment Solutions. With $382 billion of assets under management as of September 30, 2023, Carlyle's purpose is to invest wisely and create value on behalf of its investors, portfolio companies and the communities in which we live and invest. Carlyle employs more than 2,200 people in 28 offices across four continents. Further information is available at www.carlyle.com . Follow Carlyle on X @OneCarlyle. 

ABOUT CITIC CAPITAL
Founded in 2002, CITIC Capital Holdings Limited is an alternative investment management and advisory company. The firm manages over USD17.6 billion of capital across 100 funds and investment products through its multiple asset class platform covering private equity, real estate, structured investment & finance, and asset management. CITIC Capital has over 290 portfolio companies that span 11 sectors and employ over 600,000 people around the world. 

Forward-Looking Statements 

This press release contains forward-looking statements about future events and circumstances. Generally speaking, any statement not based upon historical fact is a forward-looking statement. In particular, statements regarding McDonald's plans, strategies, prospects and expectations regarding its business and industry, including expected timing and the anticipated financial and other benefits of the proposed transaction with Carlyle, are forward-looking statements. They reflect McDonald's expectations, are not guarantees of performance and speak only as of the date hereof. Except as required by law, McDonald's does not undertake to update such forward-looking statements. You should not rely unduly on forward-looking statements. McDonald's business results are subject to a variety of risks, including those that are described in its Quarterly Report on Form 10-Q for the quarter ended September 31, 2023 and subsequent filings with the Securities and Exchange Commission. 

 

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SOURCE McDonald's Corporation

FAQ

What is McDonald's Corporation's (MCD) stake in the China business after the acquisition?

McDonald's will increase its stake from 20% to 48% in the China business after acquiring Carlyle's minority ownership stake.

What has been the systemwide sales growth in the China market year-to-date since September 2019?

The business has experienced over 30% systemwide sales growth in the China market year-to-date since September 2019, indicating strong performance and demand in the region.

When is the expected closing date for the acquisition deal?

The acquisition deal is expected to close in the first quarter of 2024, contingent upon customary regulatory approvals.