BEIJING (REUTERS, BLOOMBERG) - Chinese conglomerate Citic Group Corp and Carlyle Group would buy a majority interest in McDonald's Corp's mainland China and Hong Kong businesses for US$2.08 billion (S$2.99 billion), the companies said.
Citic and Citic Capital will have a stake of 52 per cent, while Carlyle and McDonald's will own 28 per cent and 20 per cent, respectively in the businesses.
McDonald's was looking to raise US$1 billion to US$2 billion with the sale of its China and Hong Kong stores.
The months-long auction process drew interest from international private equity funds and local companies. In October, people with knowledge of the matter said TPG Capital had exited the race, leaving its erstwhile partner, Chinese grocery operator Wumart Stores, to compete against Carlyle and Citic.
Bain Capital had also teamed up with Chinese hotelier GreenTree Hospitality for a bid, the people said at the time.
McDonald's said last March it is seeking strategic partners to help it add more than 1,500 restaurants in China, Hong Kong and Korea over the next five years. It has more than 2,800 restaurants in those locations, the majority of which are company-owned. Its long-term target is to have 95 per cent of its international outlets owned by franchisees.
US restaurant chains have seen their market lead in China challenged by a growing line-up of Asian competitors such as Ting Hsin International Group's Dicos eateries.
The seller of Big Macs is also playing catch-up to Yum China Holdings, its main fast-food competitor in Asia's largest economy. The Chinese KFC operator spun off from its US parent Yum! Brands, and has a carte blanche opportunity to pursue growth and add 600 restaurants a year in the country, chief executive officer Micky Pant has said.