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McDonald’s has recently announced that it is acquiring Carlyle’s stake in its China business, increasing its minority ownership from 20% to 48%. This move comes after the fast-food giant sold off control of its restaurants in mainland China, Hong Kong and Macau in 2017 for $2.1 billion. Since then, McDonald’s has doubled its footprint in China to more than 5,500, making it the second-largest market by number of locations.

The deal is expected to close in the first quarter of 2024, assuming regulators approve it. Citic still retains its 52% stake in the business. Financial terms of the deal were not disclosed.

McDonald’s CEO Chris Kempczinski stated that the company believes there is no better time to simplify their structure given the tremendous opportunity to capture increased demand and further benefit from China’s fastest growing market’s long-term potential. The chain aims to reach 10,000 restaurants by 2028.

However, McDonald’s sales in China have struggled since the Covid pandemic began. The country accounts for about 4% of the chain’s total revenue, down 3.8% from the year prior according to Factset estimates. On McDonald’s latest earnings call, Kempczinski noted that China is dealing with “slowing macroeconomic conditions and historically low consumer sentiment,” although the chain is drawing in customers by promoting its burgers.

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