Dingdong to Repurchase Shares or Issue Dividends After Sale of China Operations

Dingdong intends to utilize a substantial majority of the cash proceeds from the sale of its China operations upon the closing of the transaction defined below for share repurchases or the issuance of dividends to its shareholders. The company entered into a definitive Share Purchase Agreement with Two Hearts Investments, a wholly-owned subsidiary of Meituan. Pursuant to the share purchase agreement, Dingdong Cayman has agreed to sell to the buyer all issued and outstanding shares of Dingdong Fresh, Dingdong Cayman's wholly-owned subsidiary incorporated in the British Virgin Islands, or Dingdong BVI, which holds through a series of wholly-owned and majority equity interest subsidiaries substantially all of Dingdong Cayman's operations in China. The buyer will pay cash consideration of $717M in the transaction. In addition, Dingdong Cayman will have the right to receive prior to August 31, 2026 total cash not exceeding $280M from Dingdong BVI and its subsidiaries. Dingdong Cayman expects that it will receive up to $997M in cash proceeds from the transaction. The final adjusted consideration will be payable in cash in two installments: 90% of the consideration payable at closing, and the remaining 10% payable following the company's settlement of applicable taxes related to the transaction. The closing of the transaction is subject to the satisfaction or waiver of various conditions. The company intends to utilize not less than 90% of the company's cash balance after the closing of the transaction for share repurchase plans and/or dividends to the company's shareholders.