In 2017, McDonald’s sold control of its restaurants in mainland China, Hong Kong, and Macau to Carlyle and Citic for $2.1 billion. The fast-food giant has since doubled its footprint in China to more than 5,500 restaurants, making it the second-largest market by number of locations. However, sales have struggled since the Covid pandemic began and account for only about 4% of the chain’s total revenue.

On Monday, McDonald’s announced that it is buying a stake in its China business from private equity giant Carlyle. The deal will increase McDonald’s minority share ownership from 20% to 48%, with Citic retaining its 52% stake. Financial terms were not disclosed and the deal is expected to close in the first quarter of 2024 pending regulatory approval.

McDonald’s CEO Chris Kempczinski stated that there was no better time to simplify their structure given the tremendous opportunity to capture increased demand and further benefit from their fastest growing market’s long-term potential. He also mentioned that despite slowing macroeconomic conditions and historically low consumer sentiment in China, they are drawing customers by promoting their burgers.

The chain aims to reach 10,000 restaurants by 2028 and this move shows their commitment towards expanding their presence in the Chinese market.