Private Equity: CITIC Capital Targets Huge Stake in McDonald’s Business in China

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Reports out of Davos signal big move by the Chinese PE firm

CITIC Capital, the Chinese private equity firm, is bidding for a 22% stake in the Chinese and Hong Kong businesses of McDonald’s Corp. The firm is looking to put some of the $2.8 billion that it raised for its fourth Chinese buyout fund in August 2019.

CITIC Capital Targets Remaining McDonald’s Stake

Zhang Yichen, the chairman and CEO of the PE firm, announced these plans in Davos in a conversation with Reuters. , Zhang currently serves as chairman of McDonald’s China and Hong Kong.

The executive said that the deal will help consolidate control of the firm. The stake is being sold by China-owned CITIC Ltd.

In 2017, CITIC Ltd, Carlyle Group, and CITIC Capital purchased 80% of McDonald’s Chinese business.

Getting an additional stake will consolidate the control of the company in the hands of CITIC Capital which will facilitate (the) long-term stability of the company,” said Zhang.

CITIC has been busy outside of China as well. It is about to start fundraising for a new PE fund that will target Japanese mid-market firms. Zhang told Reuters that it will likely close funding at the end of the year.

Finally, CITIC Capital is looking to raise another $200 million for a special purpose buyout firm. The company is pushing a U.S.-based IPO, according to a filing with the New York Stock Exchange.

Related: U.S. Private Equity Fundraising Hits New Record

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