OAK BROOK, Ill.— McDonald's Corporation announced its plan to reduce its ownership of Chipotle Mexican Grill in the near term and complete the separation of its interest by year-end to concentrate its focus on McDonald's.
Subject to market conditions, McDonald's plans to sell approximately five million shares of Chipotle stock through a registered securities offering within the next two months and use the proceeds to buy back McDonald's shares. In addition, the company expects to completely separate from Chipotle later this year through a tax-free exchange of Chipotle shares for McDonald's common stock, again subject to market conditions.
As communicated by the company at its September 2005 investor meeting, the McDonald's shares acquired as a result of these transactions will be over and above the company's commitment to return $5 billion to $6 billion to shareholders through dividends and share repurchases during 2006 and 2007, combined.
"Since we made our initial investment in 1998, Chipotle has grown from 16 restaurants in the Denver area to a strong and popular restaurant concept with more than 500 locations throughout the U.S. We are extremely proud to be a part of this genuine business success story," said Jim Skinner, chief executive officer of McDonald's.
Skinner said attracting more customers to McDonald's remains the QSR's greatest opportunity for long-term profitable growth.
"Just one percent growth in McDonald's global comparable sales translates to approximately $100 million in additional operating profit for the company and a substantial cash flow increase for all of our McDonald's Owner/Operators," Skinner said.
