McDonald’s is set to increase its minority share ownership in its China business from 20% to 48%, as it buys out private equity giant Carlyle’s stake. The deal was announced on Monday, but financial terms were not disclosed. It is expected to close in the first quarter of 2024, subject to regulatory approval.

In 2017, McDonald’s sold control of its restaurants in mainland China, Hong Kong, and Macau to Carlyle and Citic. Since then, McDonald’s has doubled its footprint in China to over 5,500 locations, making it the second-largest market by number of restaurants. However, sales in China have struggled since the Covid pandemic began, with the country accounting for only about 4% of the chain’s total revenue and down 3.8% from the previous year according to Factset estimates.

McDonald’s CEO Chris Kempczinski stated that they believe there is no better time than now to simplify their structure given the tremendous opportunity to capture increased demand and further benefit from China’s fastest-growing market’s long-term potential. With this move, Citic still retains its 52% stake in the business while McDonald’s increases its minority ownership from 20% to 48%.