McDonald’s in Talks to Sell Southeast Asia Rights to Reza

McDonald's Said in Talks to Sell Southeast Asia Rights

McDonald’s Corp. is in advanced talks to sell franchise rights in Malaysia and Singapore to a group of investors including Saudi Arabia’s Reza Group, people with knowledge of the matter said.

The sale of 20-year franchise rights in the Southeast Asian markets could fetch more than $400 million, one of the people said, asking not to be identified because the information is private.

McDonald’s is seeking 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.

McDonald’s is making progress in the search for long-term partners to grow its business in Malaysia and Singapore, a U.S.-based spokeswoman for the company said in an e-mailed statement. “As this process is ongoing, it’s not appropriate to comment further at this time,” she said.

There’s no certainty the talks will result in a deal, and another buyer could still emerge, according to the people. Reza Group wasn’t immediately available for comment.

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.

— With assistance by Dinesh Nair, and Leslie Patton

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