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McDonald’s could sell its Southeast Asia franchise rights

McDonald’s could sell its Southeast Asia franchise rightsMcDonald’s Corp. is in advanced talks to sell Southeast Asia franchise rights to a group of investors including Saudi Arabia’s Reza Group, Bloomberg reported on Wednesday, citing people with knowledge of the matter.

The sale of 20-year McDonald’s franchise rights in Malaysia and Singapore could fetch more than $400 million.

McDonald’s is seeking local partners to run its restaurants in Malaysia and Singapore as it pursues an international turnaround plan put in place after Chief Executive Officer Steve Easterbrook took over last year. The Big Mac maker, which has a $97 billion market value, is revamping its ownership structure throughout Asia, including plans to sell operations in China, Hong Kong and South Korea.

The Alireza family, which calls itself one of the oldest trading families in Saudi Arabia, owns and operates McDonald’s restaurants in the western and southern parts of the kingdom through Reza Food Services Co., according to the company website. The group has about 20 businesses across sectors like manufacturing, construction, chemicals, logistics and partners with companies including Exxon Mobil Corp.

There’s no certainty the talks will result in a deal, and another buyer could still emerge.

Unlike in its other major markets, including the U.S., most McDonald’s outlets in Asia are company-owned. The restaurant chain aims eventually to have 95 percent of its outlets in the region under local ownership, it said in March.
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