CITIC Capital hikes stake in McDonald's China

CITIC Capital Holdings Ltd has announced that its private equity arm, Trustar Capital, has signed an agreement with CITIC Group to acquire its shares in McDonald's businesses on the Chinese mainland, Hong Kong and Macao.

Following this transaction, the CITIC Capital consortium, including CITIC Capital and its private equity division, Trustar Capital, will remain the controlling shareholder with 52 percent ownership of McDonald's China, while McDonald's Corporation owns 48 percent.

This increased stake underscores the consortium's strong, long-term confidence in the potential of McDonald's China, said the company.

CITIC Capital has been instrumental in McDonald's China's significant expansion and localization efforts since 2017, helping to transform it into the second-largest market for McDonald's worldwide.

"We are pleased to see that, based on a strong confidence in the growth prospects of the Chinese economy and consumer market, as well as McDonald's China's development potential, CITIC Capital's private equity arm, Trustar Capital, has increased its investment in McDonald's China," according to McDonald's China.

"The transaction further simplifies the ownership structure. Our vision of 'Bigger, Better, Smarter' to reach 10,000 restaurants remains unchanged, and with the support of our shareholders, we will continue to drive the future growth of our business," said the company.

Since CITIC Group and CITIC Capital's 2017 investment in McDonald's China, the fast-food giant has seen expansion and localization in China.

McDonald's has more than doubled its presence, reaching 6,500 restaurants as of September 2024 — over 2.5 times the number in 2017.

This growth has solidified China as McDonald's second-largest and fastest-growing market globally.

CITIC Group's resources and network have provided McDonald's China with support for its brand-building and operational expansion.

Through CITIC Capital, McDonald's has forged strategic partnerships with major real estate developers, resulting in hundreds of new prime store locations each year.

This strategic real estate alignment has been instrumental in McDonald's rapid market penetration across various cities, from high-traffic urban centers to emerging areas.

Beyond expansion, CITIC Capital has helped McDonald's tailor its store formats to meet the needs of diverse consumer groups. By adapting store designs based on local demographics and development stages, McDonald's China has been able to innovate and upgrade its in-store experiences, further enhancing customer satisfaction and brand loyalty.

Under CITIC Capital's guidance, McDonald's China has undergone a major digital transformation. CITIC Capital collaborated with Tencent to launch a WeChat mini program for McDonald's China in six weeks. From the mini program to the current digital ecosystem, the company now has an omnichannel app, nationwide delivery service and an integrated membership system.

McDonald's China's digital platforms boast over 300 million registered members, serving more than 1 billion customers annually. Digital orders now account for over 90 percent of total orders at McDonald's China.

The McDonald's China R&D Center in Nanjing, Jiangsu province, has developed localized digital solutions, such as the McDonald's App, RGM Boss (restaurant management system) and advanced digital food safety systems. The company plans to invest 4 billion yuan ($560 million) in digital research over the next five years.

In July 2024, McDonald's China opened a Supply Chain Smart Industry Park in collaboration with four key suppliers in Hubei province. This 1.5-billion-yuan investment is aimed at enhancing productivity and promoting green development within the central and western regions.