Feb 20 (Reuters) - Middle Eastern and Chinese sovereign wealth funds are considering investing in McDonald's China business, Bloomberg News reported on Tuesday citing people familiar with the matter.

Firms including Mubadala Investment, Qatar Investment Authority (QIA) and China Investment Corp (CIC) are in talks to jointly invest in the fast-food giant's China operations as minority shareholders, the report said.

The negotiations are ongoing and a potential agreement could be one or two months away, the report said, adding that the talks could also fall apart as valuation remains a key hurdle to a deal.

McDonald's, Mubadala, QIA and CIC did not immediately respond to a Reuters requests for comment.

Last year, McDonald's had struck a deal to ramp up its stake in its China business to just under 50%, expressing confidence in the burger chain's growth prospects in the world's second-largest economy. (Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Shilpi Majumdar)