MCDONALD’S Corp. has received more than half a dozen bids for its Chinese mainland and Hong Kong stores, including offers from Beijing Tourism Group, Sanpower and ChemChina, in an auction that could fetch up to US$3 billion, people familiar with the matter said.

    Buyout firms including Bain Capital, TPG Capital and Carlyle Group too are participating in the auction with a view to teaming up with Chinese strategic bidders, they said.

    The U.S. fast food company had announced in March it was reorganizing its Asian operations by bringing in partners who would own the restaurants within a franchise business. Competitor Yum Brands is also restructuring its China operations by spinning it off ahead of a likely IPO next year.

    The planned sale of China units by McDonald’s and Yum indicates they are seeking local partners who could help ward off growing competition from domestic rivals and also better manage public perception in the wake of food-safety scares that hit the two fast-food giants in the last few years.

    Oak Brook, Illinois-based McDonald’s has hired Morgan Stanley to run the sale of about 2,800 restaurants on the Chinese mainland, in Hong Kong and South Korea, Reuters previously reported.

    As part of the deal, McDonald’s is offering a 20-year master franchise agreement to buyers, with an option to extend it by another 10 years.

    Among those who were preparing to place first-round bids ahead of the June 20 deadline were Beijing Capital Agribusiness Group, which is McDonald’s current China partner, and GreenTree Hospitality, the people added. It was not immediately clear if they made the bids.

    McDonald’s will now draw up a shortlist of bidders for the next round in the coming weeks.

    (SD-Agencies)