Meituan has agreed to acquire the Chinese business of rival Dingdong (Cayman) Ltd. for an initial $717 million in a strategic move to consolidate China’s competitive fresh grocery e-commerce market.
Under the terms of the agreement announced Thursday, Meituan will purchase all shares of Dingdong Fresh Holding Limited, a wholly owned subsidiary that oversees all of Dingdong’s operations in China. The deal structure allows the seller to withdraw up to $280 million in dividends from the target group before Aug. 31, provided the unit retains at least $150 million in net cash. This provision suggests that the total value realized by the seller could reach about $997 million. Dingdong’s overseas business is excluded from the transaction and will be spun off prior to closing.
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