Carlyle, Citic Group close to buying McDonald's China and Hong Kong stores

A consortium led by US private-equity firm Carlyle Group and China's Citic Group is close to finalising a deal to buy McDonald's Corp's stores in China and Hong Kong for up to $3 billion, the Financial Times yesterday reported, citing two people familiar with the deal.

The deal, worth around $2 to $3 billion, is likely to be announced before Christmas, the report said.

In March, McDonald's had said that it was reorganising its Asian operations by bringing in partners who would own the restaurants within a franchise business.

It had hired Morgan Stanley to assist in the sale of around 2,800 restaurants in China, Hong Kong, and South Korea.

The sale process of China and Hong Kong will run jointly while that of South Korea will be separate.

The sale had attracted more than half a dozen bids from suitors like Beijing Tourism Group, Beijing Capital Agribusiness Group, ChemChina, GreenTree Hospitality, Sanpower, and private equity firms like Bain Capital, TPG Capital and Carlyle Group.

Private equity firms TPG Capital and Bain Capital, had dropped out of the bidding process, the report said.

McDonald's China and Hong Kong business generated profits of around $200 million in fiscal year 2016, according to media reports.