On October 9th, 2117, the battle for franchise rights of McDonald's in China for nearly a year finally came to the fore. CITIC, CITIC Capital Holdings, Carlyle Investment Group and McDonald's jointly announced that they have reached a strategic cooperation and set up a new company. The new company will acquire McDonald's business in mainland China and Hongkong at a total consideration of up to 2.18 billion US dollars? .

After the transaction is completed, CITIC and CITIC Capital will hold 52% of the controlling shares in the new company, while Carlyle and McDonald's will hold 28% and 21% respectively. After the completion of this transaction, more than 1,751 McDonald's restaurants in mainland China and Hongkong will be franchised.

McDonald's also denied whether this transfer means withdrawing from the China market, saying that the new company after the transaction will further develop McDonald's business in the China market, including opening new restaurants in third-and fourth-tier cities, increasing the sales of existing restaurants, and expanding and upgrading in menu innovation, convenient service, digital retail and take-away. It is estimated that McDonald's will open more than 1,511 new restaurants in China and Hongkong in the next five years. ? Events?

McDonald's plans to transfer its business in mainland China and Hong Kong to HK$ 16.14 billion

According to the circular issued by McDonald's China Company, the above-mentioned new company will acquire McDonald's business in mainland China and Hong Kong for a total consideration of up to US$ 2.18 billion (about HK$ 16.14 billion). The purchase consideration will be partially settled by cash and partially by issuing new shares of the new company to McDonald's.

After the transaction is completed, CITIC and CITIC Capital will hold 52% of the shares in the new company, while Carlyle and McDonald's will hold 28% and 21% respectively. By then, the board members of the new company will come from CITIC, CITIC Capital, Carlyle and McDonald's. Among them, Zhang Yichen, Chairman and CEO of CITIC Capital, will be the chairman of the board of directors of the new company, and Yang Xiangdong, Managing Director of Carlyle Investment Group and co-head of the Asian M&A team, will be the vice chairman.

This also means that at present, more than 1,751 direct-operated restaurants of McDonald's in mainland China and Hongkong will be franchised, and the above-mentioned new company will become the largest franchise of McDonald's outside the United States.

McDonald's stressed that after the establishment of the new company, there will be no change in the 211,111 employees and management of McDonald's in China and Hongkong, and "the existing management team of McDonald's will remain unchanged".

In view of the future tasks of the new company, Xu Yingting, vice president of public relations of McDonald's China, said in an interview with the media on October 9 that all parties will make full use of their own resources and advantages to further develop McDonald's business, including opening stores in third-and fourth-tier cities. "It is estimated that more than 1,511 new restaurants will be opened in mainland China and Hong Kong in the next five years."

Will McDonald's withdraw from the China market after it sells its business in China and Hongkong to the new company? The company denied this, and claimed that the China market was the global growth engine, and McDonald's business in China continued to grow steadily.

Steve easterbrook, CEO of McDonald's, said: "There are huge business opportunities in the mainland of China and Hongkong. Our partners have excellent performance and have a comprehensive understanding of the China market. Together, all parties can further enhance their competitiveness and achieve rapid business growth, making McDonald's a leading enterprise in the fast food industry in mainland China and Hong Kong to better serve customers. "

analysis?

Two foreign fast food companies attract investment to speed up their development in China

So far, Yum! Brands and McDonald's, two foreign fast food giants in China, have successively "spun off" their business in China in just one year.

In October last year, Yum! Brands spun off its China division and went public independently. Yum! China has become the franchise operator of Yum! Brands in Chinese mainland, with the exclusive rights to operate KFC, Pizza Hut and Taco Bell, and has to pay a certain franchise fee every year. At the same time, Yum! China also introduced two strategic partners, Chunhua Capital and Ant Financial, which hold about 21% equity of Yum! China.

McDonald's also did the same thing, franchising its business in China and Hong Kong to a new company jointly established by CITIC, Carlyle and McDonald's. The two foreign fast food giants have introduced domestic capital in unison, which makes people think.

"The strategy of McDonald's after China is centered on the decision of China's board of directors. Now that we have two powerful partners, CITIC and Carlyle, the decision we made in China can be faster and closer to the market. " Xu Yingting explained.

"CITIC and Carlyle have strong financial strength and extensive investment fields. For example, CITIC is deeply involved in the Chinese mainland and Hongkong markets and has a deep understanding of the two places; CITIC and Carlyle also have an extensive real estate network, including CITIC Real Estate, which provides a strong backing for the rapid opening of stores. "

Xu Yingting stressed that although McDonald's China Company has a new major shareholder, its development plan in China will not change. "The entry of CITIC and Carlyle will only make our development faster."

Pan Weiqi, CEO of Yum! China, once said that "attracting investment is only to integrate better resources."

Both of the above-mentioned foreign fast food companies firmly stated that they are full of confidence in the catering market in China and will not leave China.

Then, why are Chunhua Capital, Ant Financial, CITIC, Carlyle and other capitals willing to become "takers"?

the huge catering consumption in China market is undoubtedly one of the internal driving forces for capital to compete for entry. Since 2115, China's catering market has picked up and returned to double-digit growth. According to the latest data released by the National Bureau of Statistics, the national catering revenue from October to October 2116 was 3,244.7 billion yuan, a year-on-year increase of 11.8%. Jiang Junxian, president of China Cuisine Association, predicts that it will exceed 3.5 trillion yuan for the whole year.

with the continuous advancement of urbanization, the continuous expansion of the middle class and the increase of household disposable income in China, the domestic consumption field is growing rapidly. In addition, with the growth of disposable income, the consumption of China residents in leisure and catering will continue to increase, and the market potential of third-and fourth-tier cities is particularly huge. Therefore, it is expected that the western-style fast food market will still maintain rapid growth.

"Consumer demand will be an important driving force for China's economic growth in the future. This transaction is a practical step taken by CITIC to lay out the consumption field, and it is also another measure for CITIC to implement the strategy of balanced development of finance and industry." In a briefing, Chang Zhenming, chairman of CITIC, said that this cooperation is a good opportunity for CITIC to lay out the consumption field. "McDonald's huge network and consumer groups are rare resources and will contribute to the future development of CITIC's business."

For Carlyle, this investment gives it the opportunity to cooperate with a world-renowned brand with huge market share and growth potential in China. It is reported that Carlyle has rich investment and operation experience in the global consumer and retail fields.