McDonald’s has announced plans to increase its minority stake in its China business from 20% to 48% ownership by buying Carlyle’s stake. This move is part of the fast-food giant’s broader strategy to own fewer restaurants and leave it to franchisees with knowledge of local markets to run their own locations. The deal is expected to close in the first quarter of 2024, subject to regulatory approval, and Citic still retains its 52% stake in the business.

McDonald’s sold off control of its restaurants in mainland China, Hong Kong, and Macau for $2.1 billion in 2017. At that time, Citic took the majority stake, while private equity giant Carlyle bought a 28% stake. McDonald’s held on to 20% of the business. Since then, McDonald’s has doubled its footprint in China to more than 5,500, making it the second-largest market by number of locations for the chain.

The company aims to reach 10,000 restaurants by 2028 but has struggled with sales since the Covid pandemic began. Despite this challenge, McDonald’s CEO Chris Kempczinski noted that China is dealing with “slowing macroeconomic conditions and historically low consumer sentiment,” although the chain is drawing customers back in by promoting its burgers.

In a statement announcing the deal, Kempczinski said: “We believe there is no better time to simplify our structure given the tremendous opportunity to capture increased demand and further benefit from our fastest growing market’s long-term potential.”