CARLYLE Group Inc. agreed to sell its entire stake in McDonald’s Corp.’s China operation to the hamburger chain operator for about US$1.8 billion, reaping a 6.7 times return in one of the investment giant’s best exits from the Asian nation.

McDonald’s offer for Carlyle’s stake trumped an earlier sale plan, according to people familiar with the matter.

The transaction was announced Monday without mentioning the price. Carlyle was originally planning to offload part of its 28% stake along with a holding by Citic’s private equity arm Trustar Capital in a US$4 billion deal that involved setting up a new vehicle while attracting fresh capital.

Under Carlyle’s six years of ownership, the fast-food chain ramped up store openings and delivery services in its second-biggest market. Selling the trophy asset ranks among other successful exits for the U.S. firm in China, including its sale of China Pacific Insurance (Group) Co. in 2005 and display-advertising provider Focus Media Holding Ltd. in 2018.

McDonald’s will increase its stake in the China business to 48% from 20% as part of the deal, according to a statement Monday. The Citic Consortium, a Chinese conglomerate, will continue to hold 52%.

China has grown to be McDonald’s second-largest market, with the chain doubling its locations in the country to more than 5,500 since 2017. The goal is for more than 10,000 restaurants by 2028.

The firm has implemented contactless pickup and delivery of Big Macs, fries and other menu items across China and the delivery services kept growing in the country even during COVID lockdowns.

“Together, we transformed the business, accelerating its growth profile and revolutionizing its digital marketing and operational capabilities,” X.D. Yang, chairman of Carlyle Asia, said in the statement.

Carlyle and Trustar Capital earlier approached financial investors including GIC Pte and Mubadala Investment Co. — sovereign wealth funds from Singapore and Abu Dhabi respectively — for the stake sale, Bloomberg News reported in July.

McDonald’s sold about 80% of its Chinese mainland and Hong Kong operations for around US$1.7 billion in 2017, valuing the business at as much as US$2.08 billion. (SD-Agencies)