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.
The company has recently been expanding its "Hata" overseas supply chain, which now spans 20 countries, signaling a shift from a domestic retailer to a global agritech and sourcing player.
The acquisition remains subject to approval by the State Administration for Market Regulation (SAMR) and Dingdong’s shareholders.
If blocked by regulators or if Meituan fails to close, the agreement includes tiered termination fees of up to $150 million.