McDonald's Corp announced on Monday the formation of a partnership with three companies, including CITIC Ltd, with the new company acting as the master franchisee for McDonald's businesses on the Chinese mainland and Hong Kong for the next 20 years.
The other partners are CITIC Capital Holdings and the private-equity firm Carlyle Group.
Under the deal, CITIC and CITIC Capital will have a controlling stake of 52 percent of the new company. Carlyle Group will have a 28 percent stake and McDonald's will have a 20 percent stake.
The deal involves payment of up to $2.08 billion (HK$16.14 billion).
The partnership will use its combined expertise and resources to fast track growth in McDonald's business through new restaurant openings, particularly in smaller Chinese cities, and to improve sales in existing restaurants, according to a press release that McDonald's sent to the Global Times on Monday.
The new company will focus on improvements such as menu innovation, enhanced restaurant convenience, retail digital leadership and delivery, McDonald's said.
The new company also plans to add more than 1,500 restaurants on the Chinese mainland and in Hong Kong over the next five years.
McDonald's noted that China's consumer sector is growing rapidly, benefiting from continued urbanization, an expanding middle class and rising disposable household incomes.
China's also has a larger working population than the US and Europe combined, yet spending levels of China's middle class are a small fraction of those in more developed countries, the company said.
As disposable incomes rise, people will continue to spend more on dining out, particularly in smaller Chinese cities where there is great growth potential, the company said.
