CITIC Capital Holdings announced a significant acquisition involving its private equity firm, Trustar Capital, which signed an agreement with CITIC Limited to acquire shares of McDonald's operations in mainland China, Hong Kong, and Macau. The transaction ensures that the CITIC Capital consortium, including Trustar Capital, remains the controlling shareholder of McDonald's China.
According to the agreement, CITIC Limited will sell its 19.23% stake in Fast Food Holdings Limited (FFHL) for a total consideration of $430.3 million. Additionally, the buyer will assume $74 million in outstanding shareholder loans. Upon completion, CITIC Limited will no longer hold any stake in FFHL, which owns Grand Foods Holdings Limited, the company managing McDonald's operations in mainland China and Hong Kong.
This deal marks a significant milestone for CITIC Capital, reflecting its ongoing confidence in the Chinese economy and consumer market. Since 2017, when CITIC Capital and CITIC Limited initially invested in McDonald's China alongside Carlyle, the fast-food giant has significantly expanded its presence and localized its operations in the region.
By September 2024, the number of McDonald's outlets in China had grown from 2,500 in 2017 to 6,500, with its mainland outlets more than doubling. This rapid expansion has made McDonald's China the second-largest market for the brand globally, highlighting its robust growth trajectory.
McDonald's China has also embarked on a digital transformation, fostering local supply chains and developing digital solutions. Initiatives include a collaboration with Tencent, resulting in a mini-program for customer engagement, and the establishment of a digital technology research center in Nanjing. Over the next five years, McDonald's China plans to invest $400 million in digital development and innovation.
The local supply chain enhancement involves identifying suitable domestic suppliers to lower operational costs and boost the local food industry's development, forming a mutually beneficial ecosystem.
CITIC Capital's Chairman and CEO, Zhang Yichen, expressed his commitment to driving McDonald's China into a new growth phase, targeting a "stronger, better, and smarter" future with ambitious expansion goals. The CITIC Capital consortium will continue to leverage resources with CITIC Group to support McDonald's China's steady localization and explore extensive collaboration opportunities.
