Dingdong (Cayman) has signed a definitive agreement to divest its China operations to a Meituan subsidiary for $717m.
The grocery e-commerce group will sell all issued and outstanding shares of Dingdong Fresh Holding, its British Virgin Islands (BVI)-incorporated vehicle, to Meituan subsidiary Two Hearts Investments.
Its international activities are excluded and will remain with the company following a pre-closing reorganisation.
Dingdong’s board has approved the transaction.
Completion is contingent on customary conditions, including regulatory clearances and shareholder approval at an extraordinary general meeting.
Under the agreement, and based on the balance sheet dated 31 December 2025, Dingdong will initially receive up to $280m in cash from the Dingdong BVI and its subsidiaries, provided the remaining consolidated net cash is at least $150m.
The buyer will then pay the headline $717m consideration, adjusted for net cash, working capital and other agreed items.
Dingdong founder, director and CEO Changlin Liang said: “Since its founding, Dingdong has been driven by the vision of redefining the traditional fresh food industry through the deep integration of digital technology and supply chain innovation.
“We believe that this unwavering commitment is aligned with Meituan's company mission of 'Helping People Eat Better, Live Better', laying a solid foundation for the strategic merger between the two companies.”
Payment will be split into two tranches, with 90% due at closing and the balance following settlement of relevant transaction-related taxes.
Between signing and completion, Dingdong has committed to operate the business in the ordinary course, with any operating profits or losses accruing to the buyer.
The contract also restricts changes to capital structure and non-routine agreements and includes assurances that no unauthorised leakage of funds has occurred or will occur.
Dingdong and its founder have agreed to a five-year non-competition and non-solicitation covenant covering consumer fresh grocery e-commerce in Greater China, alongside a “no-shop” clause preventing rival approaches during the interim period.
If the deal fails to complete within 12 months - subject to mutual extension - either party may terminate.
Break fees range from $75m to $150m, depending on the circumstances, including failure to close, regulatory obstacles or lack of cooperation.
Final closing will also depend on antitrust clearance from China’s State Administration for Market Regulation, completion of the overseas carve-out, tax filings for non-resident indirect transfers and the absence of any material adverse effect.
