Dingdong (NYSE:DDL) has agreed to sell its core Chinese fresh grocery business to a subsidiary of Meituan, marking a dramatic retreat for the New York-listed firm as it pivots to international markets to escape China’s cutthroat e-commerce price wars.
The Shanghai-based company entered into a definitive agreement to sell its domestic operations to Two Hearts Investments, a wholly owned subsidiary of Meituan, for an initial headline consideration of $717 million in cash.
Under the terms of the deal, Meituan will pay 90% of the consideration at closing, with the remaining 10% held back until after tax settlements.
The transaction—which follows 11 consecutive quarters of non-GAAP profitability for Dingdong—includes a five-year non-compete clause that bars Dingdong from re-entering the grocery sector in Greater China.
The deal effectively consolidates the "frontline fulfillment" market, handing Meituan a highly efficient supply chain in affluent regions like the Yangtze River Delta.
For Dingdong, the exit provides a massive cash infusion to fund its burgeoning international ambitions, which were explicitly excluded from the sale.