McDonald's set to sell Latam restaurants - report

SAO PAULO, March 19 (Reuters) - McDonald's Corp. (MCD.N), the world's largest restaurant chain, this week may announce the sale of its outlets in Latin America to an investment fund, a leading Brazilian newspaper reported on Monday.

Citing unnamed industry sources, business daily Valor Economico said the most likely buyer was Brazilian investment fund Pactual. It added that the deal could be worth about $600 million, much less than what McDonald's was asking, according to its sources.

McDonald's denied that it was close to a deal, saying in a statement that the newspaper report was "nothing but rumors."

In October, McDonald's said it hoped to convert 2,300 of its restaurants to what it calls developmental licensee ownership. Under that structure, McDonald's collects royalties from a local company that invests its own capital to expand the brand in a country or market.

That would allow McDonald's to focus its resources on the markets where it sees the biggest opportunities for growth.

The company has said that Latin America is one of the areas where it is pursuing sales of company-owned restaurants.

"For the past several months, McDonald's has been conducting a thorough evaluation process to find developmental licensees for our brand in Latin America," it said in Monday's statement.

But the company also said that the "evaluation process for Latin America is ongoing and no final decisions have been made at this time." McDonald's has over 30,000 restaurants worldwide. At the end of 2006, McDonald's had 1,656 restaurants in Latin America, where it recorded $1.66 billion in sales for the year.

The company's overall revenue last year reached $21.59 billion. Its operating profit in Latin America was $55 million in 2006, out of a total operating profit of $4.45 billion.

((Additional reporting by Nichola Groom in Los Angeles))

((Reporting by Todd Benson, editing by Brian Moss; Reuters Messaging: todd.benson.reuters.com@reuters.net; +55 11 5644-7703)) Keywords: MCDONALDS LATAM

(C) Reuters 2007. All rights reserved. Republication or redistribution ofReuters content, including by caching, framing or similar means, is expresslyprohibited without the prior written consent of Reuters. Reuters and the Reuterssphere logo are registered trademarks and trademarks of the Reuters group ofcompanies around the world.nN19301741