McDonald’s is increasing its stake in its China business to 48% ownership by purchasing Carlyle’s minority share. The fast-food giant had sold control of its restaurants in mainland China, Hong Kong, and Macau to Citic and Carlyle in 2017 for $2.1 billion. This move was part of the company’s broader strategy to own fewer restaurants and let franchisees with knowledge of local markets run their own locations. Financial details of the deal were not disclosed, but it is expected to close in the first quarter of 2024, pending regulatory approval. Citic still holds a 52% stake in the business.

“We believe there is no better time to simplify our structure,” said McDonald’s CEO Chris Kempczinski in a statement. Since selling off control in 2017, McDonald’s has doubled its footprint in China to over 5,500 restaurants, making it the second-largest market by number of locations for the chain. The company aims to reach 10,000 restaurants by 2028 and believes that there is tremendous opportunity for growth in this market. However, sales have struggled since the Covid pandemic began; China accounts for about 4% of McDonald’s total revenue, down from 3.8% the year prior according to Factset estimates. On a recent earnings call, Kempczinski noted that slowing macroeconomic conditions and historically low consumer sentiment are affecting sales in China but that promotions on burgers are drawing customers back into stores.