23 November 2023

McDonald's to acquire Carlyle's PE stake in McDonald's China

McDonald's is set to acquire the Carlyle Group's stake in McDonald's China in a deal worth approximately US$1.8 billion. The move represents one of Carlyle's most profitable exits in Asia, generating a 6.7 times return. The transaction is subject to regulatory approvals and is expected to close in the first quarter of 2024.


McDonald's acquisition of Carlyle's 28% stake in McDonald's China, which includes operations in Hong Kong and Macau, brings McDonald's shareholding in the company to 48%. The controlling stake is held by state-owned CITIC, which owns 52% of the shares. McDonald's China has expanded significantly, doubling its number of outlets to 5,500 since 2017, making the country its second-largest market. As of September 2019, the company has also seen more than 30% growth in sales and aims to cross the 10,000 outlet mark in China by 2028.

In 2017, McDonald's divested control of its restaurants in mainland China, Hong Kong and Macau for US$2.1 billion as part of a strategic shift to limit direct ownership. At that time, state-owned investment company CITIC acquired a majority stake, Carlyle acquired 28% and McDonald's retained 20%. During Carlyle's investment, the number of McDonald's restaurants in China more than doubled to 5 500 and the number of food deliveries also increased.

The transaction comes at a time when private equity firms are limiting buyouts in China and facing limited capital raising from investors due to geopolitical tensions and US restrictions on investment in sensitive sectors. Global buyouts targeting Chinese companies fell to 5.2% in the first nine months of this year, down from 10.6% in 2021 and 5.7% the previous year, according to a report by law firm Dechert.