(Yicai) Oct. 22 -- Chinese investment firm Citic Capital will become the largest shareholder of McDonald's China after acquiring its parent firm Citic Group's entire stake in the owner of the operator of McDonald's restaurants in the Chinese mainland, Hong Kong, and Macao.

Citic Capital's private equity arm Trustar Capital will buy Citic's last 19.2 percent stake in Fast Food Holdings for USD430.3 million, thus receiving a 10 percent stake in Grand Foods Holdings, Citic and Citic Capital announced yesterday. Fast Food Holdings holds a 52 percent stake in McDonald’s China’s operator Grand Foods Holdings.

After the deal is completed, Trustar Capital will own nearly 62 percent of Fast Food Holdings, with the remaining 38 percent stake owned by CCP Fast Food Holdings, another subsidiary of Citic Capital.

"As the controlling shareholder of McDonald's China, we are committed to elevating McDonald's China to new heights and achieving our goal of opening over 10,000 stores," Citic Capital said in its statement yesterday, citing Zhang Yicheng, Citic Capital's chairman and chief executive officer and McDonald's China's chairman.

"Over the years, we have collaborated closely with Citic to facilitate McDonald's China's rapid growth and have achieved remarkable results in terms of business expansion, sustainable development, and strong recognition from investors and consumers," Zhang noted. "We look forward to continuing the business collaboration with Citic in the future and jointly promoting the high-quality development of China's economy and consumer market."

In 2017, McDonald's sold a controlling stake in its China business to Citic, Citic Capital, and Carlyle Group for nearly USD2.1 billion. After the transaction, McDonald's retained 20 percent of Grand Foods Holdings, Carlyle received 28 percent, and Citic and Citic Capital split the rest.

The 52 percent stake in Grand Foods Holdings owned by Citic and Citic Capital was divided between the two through Fast Foods Holdings. Citic owned 62 percent of Fast Food Holdings, and Citic Capital the remaining 38 percent, which equaled to 32 percent and 20 percent, respectively, of Grand Foods Holdings.

In early 2020, Citic indirectly transferred a 22 percent stake in Grand Foods Holdings to Citic Capital by selling an about 42 percent stake in Fast Food Holdings for USD533 million. Citic's stake in Fast Food Holdings fell to 19.2 percent.

"Since 2017, McDonald's China has experienced rapid expansion and robust development, marking a significant milestone for us," Citic Capital pointed out. "Driven by strong optimism about the growth prospects of the Chinese economy and consumer market, as well as the development potential of McDonald's China, the Citic Capital consortium has increased its investment."

Last year, McDonald's bought Carlyle's 28 percent stake in Grand Food Holdings for USD6 billion, raising its stake to 48 percent.

Editor: Futura Costaglione