McDonald's sells controlling stake in China ops for $1.7 billion

McDonald’s has agreed to sell a controlling stake in its China and Hong Kong operations for a staggering $1.7 billion. According to a statement, the investors, Chinese state-backed conglomerate Citic, Citic Capital Holdings and US private-equity firm Carlyle Group LP will acquire an 80% holding in the deal. Under the agreement, Citic and Citic Capital Partners will jointly take a 52% stake, while Carlyle will hold 28%. Oak Brook, Illinois-based McDonald’s, will hold onto the remaining stake.

McDonald's CEO Steve Easterbrook said in a statement that the China deal combines McDonald's with partners "who have an unmatched understanding of the local markets and bring enhanced capabilities and new partnerships".

Pictured: Zaf Mahomed, CFO of McDonald's South Africa

The new owners intend to increase the fast food chain's footprint in the region by adding more than 1,500 restaurants in smaller Chinese cities over the next five years. McDonald's currently operates or franchises more than 2,400 outlets in mainland China. The fast-food behemoth is also considering deals in markets such as South Korea, Japan and Southeast Asia, as it streamlines its global operations.