A number of sovereign funds are considering investing in McDonald's China

wallstreetcn ·  Feb 20 21:47

A number of Middle Eastern and Chinese sovereign funds are in talks to jointly invest in McDonald's China business.

According to people familiar with the matter revealed to the media, companies including Mubadala Investment, Qatar Investment Authority (Qatar Investment Authority), and China Investment Corporation are considering joint investment in McDonald's China as minority shareholders.

However, people familiar with the matter also revealed that negotiations are currently progressing slowly, and it may take 1-2 months to reach a potential agreement, and valuation is still a key point in the negotiations.

According to reports, China is the second-largest market for McDonald's. It has more than 5,500 McDonald's restaurants, and plans to achieve the goal of 10,000 restaurants by 2028.

CITIC Group, the majority shareholder, has been holding 52% of McDonald's China shares through its holding subsidiary Trustar Capital (Trustar Capital). Recently, it has been considering various investment plans so that Xinchen Capital can seek to reduce its holdings — such as transferring shares to new investment companies.

In 2017, McDonald's Global sold about 80% of McDonald's China business for US$2.08 billion. The CITIC Consortium, PE giant Carlyle Group, and McDonald's Global held 52%, 28%, and 20% of the shares respectively. McDonald's China management company officially changed its name to “Golden Arch (China) Co., Ltd.”

In November of last year, after McDonald's Global agreed to acquire 28% of Carlyle Group's shares in the Chinese business, McDonald's Global holdings in the Chinese business will increase to 48%, worth about 1.8 billion US dollars.

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