McDonald's to sell Brazil Operations

Discussion in 'Politics' started by Arnie, Sep 16, 2006.

  1. Arnie


    McDonald's puts Latin America operations on sale - report

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    (Updates with comment from McDonald's Corp.)
    SAO PAULO (MarketWatch) -- U.S.-based fast-food giant McDonald's Corp. (MCD) has placed its operations in Brazil and throughout Latin America up for sale, according to a report Friday in local business daily Valor Economico.
    McDonald's operations in Brazil are valued at around 1.5 billion Brazilian reals ($693 million), the report said. The restaurant chain also plans to sell other units in Latin America, but no details about those operations were disclosed.
    In any sale, the buyer would acquire all McDonald's operations, but the U.S. company would continue receiving royalties for use of the brand name.
    JP Morgan was hired to manage the sale process, the report said.
    In a statement, McDonald's said it is studying ways to improve its sometimes-troubled relationship with Latin American franchisees, but didn't confirm they are up for sale.
    "Our target is always on continuing to increase our brand, giving our expertise to our clients. This is our focus. There is a process, and it is premature to speculate about potential details," McDonald's officials said in the statement.
    The sale process would be part of a change in the strategy of the company in the region, were McDonald's faced problems with its franchised units.
    In the past, the company suffered from legal battles with its franchisees, who charged that the company saturated markets with too many units, reducing franchise profits.
    McDonald's previously announced plans to convert as many as 1,500 restaurants in 15 to 20 countries to development licenses over the next three years, effectively handing ownership to local entrepreneurs who will provide the capital and the land.
    In 2005, McDonald's posted revenue of BRL2.5 billion In Brazil, where the company has 544 restaurants, including 137 franchises.
    -Contact: 201-938-5400
  2. ============

    Sounds like MCD just plain overbuilt, which is an understandable error;apparently they also over did that through out ''South America''
    :p :cool:

    Wisdom is profitable to direct