McDonald’s has received more than half a dozen bids for its China and Hong Kong stores, including offers from Beijing Tourism Group, Sanpower and ChemChina, in an auction that could fetch up to US$3 billion.
Sanpower Group, a technology and real estate firm, said it has submitted a joint bid with Beijing Tourism Group for the stores.
Buyout firms including Bain Capital, TPG Capital and Carlyle Group are also participating in the auction with a view to teaming up with Chinese strategic bidders, people familiar with the plans said.
The US fast-food company announced in March it was reorganising its Asian operations by bringing in partners who would own the restaurants within a franchise business. Its competitor Yum Brands is also restructuring its China business by spinning it off ahead of a likely IPO next year.
The planned sale of China units by McDonald’s and Yum indicates they are seeking local partners who could help to ward off growing competition from domestic rivals and also better manage public perception in the wake of food-safety scares that hit the two fast-food giants in the last few years.
“Given the difficulties Western chains have had recently with public perception, local players have become a serious competitive threat,” said Elizabeth Friend, a consumer foodservice analyst at Euromonitor International.
McDonald’s has hired Morgan Stanley to run the sale of about 2,800 restaurants in China, Hong Kong and South Korea, Reuters previously reported. The sale in South Korea is being run separately and it is not known if the same parties have expressed interest in that sale.
As part of the deal, McDonald’s is offering a 20-year master franchise agreement to buyers, with an option to extend it by another 10 years.
(Source: The National )