Interface News Reporter | Chen Jing
Interface News learned from CITIC Capital that on October 21st, CITIC Capital announced that its private equity investment business, Xinchen Capital, has signed an agreement with CITIC Group to acquire its holdings of McDonald's China, Hong Kong, and Macau businesses (hereinafter referred to as "McDonald's China").
After the transaction, the CITIC Capital consortium (including CITIC Capital and its private equity investment business, Xinchen Capital) remains the controlling shareholder of McDonald's China. This continuous increase also demonstrates the long-term confidence of the CITIC Capital consortium in McDonald's China business.
When it comes to this equity acquisition, CITIC Capital stated that "Golden Arches" is a milestone investment project that the company is proud of. Since investing in McDonald's China in 2017, McDonald's China business has achieved rapid growth and maintained a steady development trend. Based on their firm confidence in the prospects of the Chinese economy and consumer market, as well as their continued optimism about the future development potential of McDonald's China, the CITIC Capital consortium has decided to continue to invest in McDonald's China.
In 2017, CITIC Capital reached strategic partnerships with CITIC Group (00267. HK) and Carlyle and McDonald's. At the beginning of 2020, CITIC Capital acquired a 22% stake in McDonald's China from CITIC Group, further expanding its shareholding to 42%.
On the same evening, CITIC Securities also released an announcement regarding the company's sale of controlling interests in McDonald's mainland China and Hong Kong businesses, as well as related shareholder loans. According to the announcement, on October 21, 2024, a wholly-owned subsidiary of CITIC Group entered into a share purchase agreement with Trustar Fast Food Holdings Limited (the buyer), a newly established fund wholly owned by a wholly-owned subsidiary of Xinchen Capital Partnership Limited as a general partner. According to the agreement, CITIC Group agreed to sell and the buyer agreed to purchase 19.23% equity of Fast Food Holdings Limited (FFHL), and the buyer will also bear an outstanding shareholder loan worth approximately $74 million, with a total consideration of $430.3 million for the sale.
On the announcement date, CITIC Holdings indirectly holds 19.23% of the equity of FFHL, while FFHL directly holds 52% of the equity of Grand Foods Holdings Limited (GFHL), which owns McDonald's mainland China and Hong Kong businesses. After the sale is completed, CITIC Group will no longer hold equity in FFHL.
For this transaction, CITIC Group stated in the announcement that the sale is based on the group's business development strategy, providing a good investment return for the group and in line with the group's interests. It is expected that this sale will not have any significant adverse impact on the operation and financial condition of the group.