REASONS FOR AND BENEFITS OF THE ACQUISITION AND THE [MCDONALD's] FRANCHISE
CITIC is China’s largest conglomerate operating domestically and overseas, with businesses in financial services, resources and energy, manufacturing, engineering contracting and real estate as well as others. CITIC is a constituent of the Hang Seng Index
.
China’s consumer sector is growing rapidly, benefiting from continued urbanization, an expanding middle class and increasing disposable household incomes. China’s working population is larger than those of the US and Europe combined, yet spending levels of China’s middle class are a small fraction of those in more developed countries. As disposable incomes rise, people will continue to spend more on leisure and on dining out, and there is particularly great growth potential in tier 3 and 4 cities. As such, the market for Western Quick Service Restaurants is expected to continue to grow rapidly. This investment offers a chance to deepen CITIC’s exposure to the consumer sector, which is poised to be the main driver of China’s economy for decades to come. This transaction is also another step in CITIC’s efforts to better balance the financial and non-financial businesses.
CITIC sees opportunities for synergies with its existing businesses. McDonald’s extensive network and consumer base will provide CITIC with invaluable insight, which CITIC will leverage to the benefit of its existing businesses.
[...]
REASONS FOR AND BENEFITS OF THE ACQUISITION AND THE [MCDONALD's] FRANCHISE
CITIC is China’s largest conglomerate operating domestically and overseas, with businesses in financial services, resources and energy, manufacturing, engineering contracting and real estate as well as others. CITIC is a constituent of the Hang Seng Index . China’s consumer sector is growing rapidly, benefiting from continued urbanization, an expanding middle class and increasing disposable household incomes. China’s working population is larger than those of the US and Europe combined, yet spending levels of China’s middle class are a small fraction of those in more developed countries. As disposable incomes rise, people will continue to spend more on leisure and on dining out, and there is particularly great growth potential in tier 3 and 4 cities. As such, the market for Western Quick Service Restaurants is expected to continue to grow rapidly. This investment offers a chance to deepen CITIC’s exposure to the consumer sector, which is poised to be the main driver of China’s economy for decades to come. This transaction is also another step in CITIC’s efforts to better balance the financial and non-financial businesses.
CITIC sees opportunities for synergies with its existing businesses. McDonald’s extensive network and consumer base will provide CITIC with invaluable insight, which CITIC will leverage to the benefit of its existing businesses.
[...]
http://www.hkexnews.hk/listedco/listconews/sehk/2017/0109/LT...