Changed deal as McDonald’s Corp sells
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While finalising a buyer for its China and Hong Kong stores, McDonald’s Corp has decided to keep a “significant” minority stake.
The US fast-food chain has picked a consortium led by private-equity firm Carlyle Group and Chinese conglomerate Citic Group to buy the stores.
Its decision to retain the minority stake lowered the price tag from the $3 billion reportedly sought. An insider says McDonald’s decided to keep a slice of the business as it wants exposure to future growth in the world’s second-largest economy.
Meantime, the company will also keep its stores in South Korea, which it previously also wanted to sell, Reuters reports.
Early this year McDonald’s said it was reorganising its business in the region, seeking strategic partners in China, Hong Kong and South Korea as it switches to a less capital-intensive franchise model.
Questions & Answers
Q.Which specific companies are involved in the consortium buying McDonald's stores in China and Hong Kong?
Which specific companies are involved in the consortium buying McDonald's stores in China and Hong Kong?
The consortium buying the stores is led by the private-equity firm Carlyle Group and the Chinese conglomerate Citic Group. These two entities are partnering in the acquisition.
Q.Why did McDonald's decide to retain a minority stake in the sale of its China and Hong Kong stores?
Why did McDonald's decide to retain a minority stake in the sale of its China and Hong Kong stores?
McDonald's chose to keep a minority stake because it wants to maintain exposure to the future growth potential of China's economy. This decision also resulted in a lower overall sale price.
Q.What was the reported initial asking price for the China and Hong Kong stores before McDonald's changed its deal terms?
What was the reported initial asking price for the China and Hong Kong stores before McDonald's changed its deal terms?
The reported initial asking price for the China and Hong Kong stores was $3 billion. This figure was lowered after McDonald's decided to retain a significant minority stake in the business.
Q.Is McDonald's still planning to sell its stores in South Korea as part of its regional restructuring?
Is McDonald's still planning to sell its stores in South Korea as part of its regional restructuring?
No, McDonald's has decided to keep its stores in South Korea. The company previously intended to sell these stores, but this plan has now changed as part of its revised strategy.
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