(Yicai) Oct. 22 -- Citic Capital, the alternative investment arm of China’s Citic Group, will become the largest shareholder of McDonald's China after acquiring its parent company’s entire stake in the firm that runs the fast-food chain in the Chinese mainland, Hong Kong, and Macao.

Citic Capital's private equity unit Trustar Capital will buy Citic's 19.2 percent stake in Fast Food Holdings for USD430.3 million, thereby gaining 10 percent of Grand Foods Holdings, the operator of McDonald’s China, state-owned Citic and Citic Capital announced yesterday. Fast Food owns 52 percent of Grand Foods.

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

“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 Yicheng, Citic Capital's chairman and chief executive and chairman of McDonald's China, said in a statement.

“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,” Zhang added.

McDonald’s entered the mainland market in 1990 and has since grown into one of China’s major fast-food chains. In 2017, it 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, Carlyle had 28 percent, and Citic and Citic Capital split the rest.

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

In early 2020, Citic indirectly transferred a 22 percent stake in Grand Foods to Citic Capital by selling about 42 percent of Fast Food for USD533 million, with Citic’s stake falling 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 for USD6 billion, boosting its interest to 48 percent.

Editor: Futura Constaglione