CITIC Ltd, the main listed arm of Chinese state-owned conglomerate CITIC Group, plans to sell a 22 percent stake in McDonald’s Corp’s business in the Chinese mainland and Hong Kong, which is likely to be bought by the group’s private equity arm.
The Hong Kong-listed company aims to raise at least 2.17 billion yuan ($312 million) through the sale, according to a company filing to the China Beijing Equity Exchange on Wednesday.
CITIC Capital, the group’s flagship alternative investment arm, which manages more than $26 billion in assets, would likely become the buyer, said two people with direct knowledge of the matter.
The sale is set to be finalized by early February, said one of the people who declined to be identified as the information was private.
CITIC Ltd said the transaction is purely a “commercial decision” and it will continue to work for the development of McDonald’s business in China along with its partners. CITIC Capital said it is “actively participating” in the bidding process.
McDonald’s said the transaction would not affect its business strategy and daily operations in the Chinese mainland and Hong Kong.
The deal comes months after CITIC Capital raised $2.8 billion in its fourth China buyout fund, the firm’s biggest private equity fund to date, bolstering its ability to cut deals in the world’s second-largest economy.
CITIC Ltd is selling the 22 percent stake via Fast Food Holdings Ltd, a holding firm that it set up with CITIC Capital for the combined controlling stake of 52 percent in McDonald’s mainland and Hong Kong business.
McDonald’s Corp in early 2017 agreed to sell 80 percent of such business to CITIC Ltd, CITIC Capital and Carlyle Group LP for $2.08 billion, saying at the time that it hoped tying up with local partners could speed up growth in China.
CITIC Ltd held 32 percent of the business, with CITIC Capital holding 20 percent and Carlyle holding 28 percent. McDonald’s retained the remaining 20 percent, the companies said in a statement at the time.
After the stake sale, CITIC Ltd will retain 10 percent of the business.
In late 2017, the US-based fast food giant changed its registered business name to “Golden Arches (China) Co Ltd” in China and said it planned to nearly double the number of its outlets to 4,500 by 2022.