In March this year, American fast food giant McDonald’s (nyse: MCD) announced that it had sold off its South African operations to Cyril Ramaphosa, one of the country’s most influential and politically-connected businessmen. The deal was finalized just last Thursday, even though financial specifics of the sale are still under wraps.
The deal will grant Ramaphosa 20-year control of the fast food giant’s South African operations, including the exclusive powers to lease out real estate of its over 130 outlets spread throughout the country.
But why did McDonald’s sell off? Ever since the fast food giant launched its operations in South Africa in 1995, it has struggled against intense competition from home-grown food chains such as Famous Brands, which owns popular restaurants like Steers, Wimpys and Debonairs Pizza.
Giving reason for the chain’s less–than-stellar performance in South Africa, Anthony Hamms, a Johannesburg-based Private Equity analyst said: “South Africans generally tend to prefer home-grown, locally-owned companies to foreign ones. Since McDonald’s was not locally owned, I think we generally preferred to go with other alternatives. But with Mr. Ramaphosa on board now, I’m pretty sure McDonalds will do extremely well. He’s got the Midas touch in business. Very soon, McDonald’s will turn to gold.”
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The deal will grant Ramaphosa 20-year control of the fast food giant’s South African operations, including the exclusive powers to lease out real estate of its over 130 outlets spread throughout the country.
But why did McDonald’s sell off? Ever since the fast food giant launched its operations in South Africa in 1995, it has struggled against intense competition from home-grown food chains such as Famous Brands, which owns popular restaurants like Steers, Wimpys and Debonairs Pizza.
Giving reason for the chain’s less–than-stellar performance in South Africa, Anthony Hamms, a Johannesburg-based Private Equity analyst said: “South Africans generally tend to prefer home-grown, locally-owned companies to foreign ones. Since McDonald’s was not locally owned, I think we generally preferred to go with other alternatives. But with Mr. Ramaphosa on board now, I’m pretty sure McDonalds will do extremely well. He’s got the Midas touch in business. Very soon, McDonald’s will turn to gold.”
Click here for more info