Various reports Thursday said McDonald’s Corp. had received more than half a dozen bids for the planned sale of its stores in China and Hong Kong. At least one of the offers, which reportedly go up to $3 billion for the restaurants, was confirmed by the bidder.
China’s Sanpower Group — a technology and real estate firm — said late Wednesday it had submitted a joint bid with Beijing Tourism Group for the stores. The company hopes to integrate McDonald’s outlets in its commercial spaces, such as malls.
“In recent years, we are building more offline commercial stores, aiming to provide better shopping experience for consumers. McDonald’s could provide new brand elements for us,” Sanpower spokesman Zou Yan said in an email to BBC.
Other Chinese companies being associated with the bid are China National Chemical Corp., or ChemChina, Beijing Capital Agribusiness Group and GreenTree Hospitality. Global firms who have shown an interest include Bain Capital, TPG Capital and Carlyle Group, according to China’s national broadcaster, CCTV. Beijing Capital Agribusiness Group is McDonald’s current partner in China.
While the Oak Brook, Illinois, fast-food giant does not provide a regional breakdown of its sales, CCTV cited anonymous sources who said the Chinese mainland and Hong Kong businesses yielded about $200 million in earnings before interest. The company has appointed Morgan Stanley to oversee the sale of its restaurants in these two regions, as well as in South Korea. The sale of the South Korean stores is being conducted separately, but the three regions together have about 2,800 restaurants, of which about 2,200 are in China.
As part of the sale, McDonald’s is also offering a 20-year master franchise agreement, with an option to extend it by 10 years. The deadline for placing the first-round bids was Monday.
A spokeswoman for McDonald’s told Reuters in an email that the sale process was “making progress,” and that “as no decisions have been made, it would be premature to speculate further.”
McDonald’s and its biggest rival, Yum Brands — operator of KFC and Pizza Hut — have both been trying to streamline their China businesses amid growing competition from local companies. Food safety concerns have also surrounded the two international fast-food players in the last few years.