Fast Food Giant McDonald’s To Sell 80% Business In China For $2.08 Billion

American fast-food giant McDonald’s is selling a controlling stake of almost 80% in mainland China and Hong Kong franchise business to a consortium of Citic Group and the Carlyle Group for up to $2.8 billion, the companies announced today.

In a joint statement issued by the company, it was said that Citic Limited, Citic Capital Holdings, Carlyle Group and McDonald’s will form a company that will act as the franchisee responsible for the chain’s business in China and Hong Kong for 20 years.

The stake will be split as such that 52% will be held by Citic and Citic Capital, 28% will be held by Carlyle and McDonald’s will have 20% of the new company. Last year, the fast-food brand announced that it planned to sell almost 2,000 of their restaurants in China after sales plummeted due to tensions in the South China Sea impacting American companies’ results in the country. And in 2014, the brand suffered another loss when a food safety scandal involved one of the meat suppliers came to light.

This new company will focus on the growth in China’s smaller regional cities with plans to open more than 1,500 restaurants in Hong Kong and the mainland over the next five years.

Citic is a large conglomerate with interest in businesses from energy and manufacturing to real estate and in a statement to the Hong Kong stock exchange, they said that the purchase would deepen its exposure to China’s consumer sector.