CITIC to sell 19.23% stake in China’s McDonald’s operator to Trustar for US$430M

CHINA – State-owned investment company CITIC (China International Trust Investment Corporation) has announced plans to sell a 19.23% stake in Fast Food Holdings (FFHL) to Trustar Fast Food Holdings.

The US$430.3 million sales agreement includes the transfer of outstanding shareholder loans from FFHL, totaling nearly US$74 million.

CITIC will divest its indirect stake in FFHL, which owns a 52% share in Grand Foods Holdings (GFHL). GFHL is the parent company for McDonald’s operations in mainland China and Hong Kong.

These operations encompass the management and administration of McDonald’s restaurants in mainland China, Hong Kong, and Macau.

In 2017, CITIC, together with CITIC Capital (now known as Trustar) and Carlyle, acquired a majority stake in McDonald’s China and Hong Kong operations for US$2.1 billion.

In 2023, McDonald’s increased its ownership to 48% by buying Carlyle’s 28% stake, valuing the business at US$6 billion, according to Reuters.

The sale agreement reflects CITIC’s ongoing adjustments to its portfolio, as outlined in its announcements from January and August 2017 about acquiring a controlling interest in McDonald’s China and Hong Kong, as well as its March 2020 announcement regarding the disposal of this interest and associated shareholder loans.

The decision aligns with CITIC Group’s business development strategy and is expected to yield favorable investment returns.

CITIC stated that the transaction should not affect its operations or financial position.

In early 2024, McDonald’s China entered into a partnership with Cainiao, the logistics arm of Alibaba Group, to improve supply chain efficiency.

McDonald’s China agreed to deploy Cainiao’s RFID technology in its supply chain with built-in tags on food packages, allowing the company to track products from factories to restaurants, according to a statement by the Hangzhou-based logistics firm.

A trial project of the RFID technology helped reduce the time needed for stocktaking each day from 1 hour to 15 minutes for restaurants while improving the accuracy of inventory data by 30%.

RFID is a third-generation identification technology, after bar codes and QR codes, and has been widely adopted in supply chain tracking. With a built-in microchip, data is transmitted through radio frequency signals.

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