Shares in the Japanese affiliate of McDonald’s Corp briefly fell as much as 10% on Wednesday after the U.S. fast-food giant (MCD.N) said it would cut its stake in its only publicly listed overseas unit to bolster finances hit by the coronavirus.
Shares in McDonald’s Holding Company Japan (2702.T) were down 8% at 5,230 yen by midday in Tokyo, after the U.S. company said overnight it would cut its stake in the Japanese unit to 35% from nearly 50%.
The sale comes as the Japanese affiliate has proven more resilient than other fast-food restaurants in the country thanks to its popular take-out and delivery service, even as it has also been hit by the coronavirus pandemic.
The Japanese business has a market capitalization of roughly $7 billion and expects to post a full-year net profit of around 18.2 billion yen ($173 million), up 7.8 percent from last year.
McDonald’s Corp on Tuesday also announced a drop in global same-store sales and weaker-than-expected earnings.
The U.S. company had briefly considered cutting its stake in the Japanese business a few years ago after a series of food scandals, but later shelved the plans.
McDonald’s Holding Company Japan said it did not expect a major impact on its business from the sale.
“Even after selling part of their stake, they will continue to support us … as shareholders with a stake of over 35%,” it said in a statement.