Citic to trim McDonald’s China stake as ‘Vision 2022’ targets come under pressure amid competition, costs
- Citic puts a 22 per cent stake in its China and Hong Kong franchises up for bidding, potentially lowering its ownership to 10 per cent
- Planned sale comes with data suggesting sales and profits are stalling amid competition, rising costs
China’s state-owned conglomerate Citic Limited is seeking to sell a substantial stake in its McDonald’s fast-food operations in mainland China and Hong Kong, as reported data indicates the venture is lagging behind its “Vision 2022” sales growth plan amid rising competition and costs.
Citic is putting up 22 per cent stake in the unit McDonald’s China for a minimum of 2.17 billion yuan (US$313 million) through a bidding process, the company said in a filing on the China Beijing Equity Exchange on Wednesday. A successful sale will reduce its ownership to 10 per cent.
Citic Capital Partners, which already owns 20 per cent of the venture, may bid for the stake, according to a company spokeswoman. The asset management affiliate the conglomerate is optimistic about the franchise, the spokeswoman said.
The bidding will be opened for 20 working days, according to the filing. The outcome may be known by mid-February given the long Lunar New Year holiday, people familiar with the process.
