McDonald’s has received half a dozen bids for its stores in China and Hong Kong, in an auction that is expected to fetch up to US$3 billion (HK$23 billion).
The fast food company announced in March that it was selling its stores in China, Hong Kong and South Korea and bringing in partners who would own restaurants within the franchise, according to Reuters. The deal includes a 20-year franchise agreement for buyers, with an option to extend by another ten years. South Korean sales are being conducted separately.
Sanpower Group confirmed to Reuters that it has submitted a joint bid with Beijing Tourism Group. Sanpower is a private conglomerate whose core businesses are in the technology and modern service industries.
“In recent years, we are building more offline commercial stores, aiming to provide a better shopping experience for consumers. McDonald’s could provide new brand elements for us,” a Sanpower spokesperson told Reuters in an email.
State-owned ChemChina is also a bidder, along with international buyout firms like Bain Capital, TPG Capital and Carlyle Group, who are aiming to team up with Chinese strategic bidders.
McDonald’s is the second largest fast food chain in China behind Yum Brands, which operates KFC and Pizza Hut. There are over 22,000 McDonald’s restaurants in the country, according to its site. Yum Brands is also restructuring by spinning off its China business.
Local partners could help the two fast food chains contend with domestic rivals and manage public perception relating to food safety scares in the last few years, said Reuters. In 2014, a supplier for McDonald’s and Yum was implicated in a tainted meat scandal that forced McDonald’s to pull chicken and beef products off its menus in parts of China.