CNN.com - McDonald's Japan IPO much anticipated
Aria Murphy
Published Apr 11, 2026
| McDonald's Corp.s' IPO will be the second high profile offering of the year | |
By Staff and wire reports
TOKYO, Japan -- McDonald's Corp.'s Japanese subsidiary will be one of the most-watched public offerings in Tokyo this year, market watchers say.
McDonald's Japan announced Wednesday that it plans to go public in late July.
It would be the first subsidiary of Oak Brook, Illinois-based McDonald's to go public. The announcement of the deal, known as an initial public offering, came on the heels of another high-profile IPO.
Dentsu, Japan's largest advertising agency, confirmed Tuesday it will hold an IPO this year. That offering will likely occur in October or November.
High public offering profiles
The two offerings are the highest profile deals coming to market so far this year. Experts said the fact they are market leaders likely give the companies the traction for an offering. They are launching at a time when other Japanese companies are shelving IPOs.
Japanese stocks hit a 15-year low Thursday. But analysts had anticipated an announcement from McDonald's Japan for around six months. The company has hired Daiwa Securities to prepare the offering.
Like its parent, which commands top spot worldwide in fast food, McDonald's Japan is the No. 1 fast-food retailer. It had sales of $3.6 billion, or 431.1, in 2000.
It has yet to decide how many shares it will offer or at what price. It also has not decided whether to float on Nasdaq Japan or Japan's over the counter market.
McDonald's Japan, led by its colorful president Den Fujita, posted a decline in profits for its last year. Its $250 million gain was down 6.7 percent. That was its first drop in seven years.
The company attributed the dip to its drive to open new stores. It unveiled 400 new restaurants last year, meaning it operated 3,600 stores as of December.
A fiercely competitive market
Competition is fierce in Japanese fast food. McDonald's has undercut its competitors by cutting prices. One expert said it has an advantage over competitors such as Mos Food and Kentucky Fried Kitchen Japan because its quality is much more predictable.
Burger King is reportedly keen to exit the Japanese market as competition intensifies.
Edward Lee, a services analyst at Tsusaba Securities, said McDonald's also faces competition from convenience stores. He was skeptical that this was the best time for an offering, given the price wars and poor stock market.
The Japanese restaurant market is tapped out, according to one analyst. Mike Morizumi, a restaurant analyst with UBS Warburg, said it has held steady at 28 trillion to 29 trillion for the last 8 years.
"We're in a very mature dining-out market," he said. But he noted that there has been explosive growth in mid-price restaurants.
Chains that charge around 2,500 per customer are seeing growth anywhere from 15 percent to 50 percent. Companies such as Reins International, Global Dining and Watami Food Service have all seen good growth.
Despite economic weakness, lifestyle changes in Japan have made eating out increasingly popular. Japanese workers are spending less time at the office. The number of hours worked a week has dropped to 1,800 from 2,500 in the 1960s, he said.
A double-edged sword
Morizumi said it remains to be seen if the mid-price growth spills over to cheaper fast-food chains.
If McDonald's uses offering money to build more stores, as expected, it could be a "double-edged" sword, according to the analyst.
The chain has the scale to make more restaurants work cheaply. But making them profitable would require it stealing more market share away from its competitors. Chains like Mos Foods, with revenues around 60 billion, are a fraction of the size.
But he and Morizumi said Japanese investors will certainly be scrutinizing how the offering performs.
"It is one everyone is taking a keen interest in," Morizumi said.
Reuters contributed to this report.
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