Meitu, Inc. (SEHK:1357) and Xiamen Meitu Network Technology Co., Ltd. entered into a framework agreement to acquire 57.09% stake in Dajie Net Hong Kong Limited and 75.37% stake in Beijing Dajie Zhiyuan Information Technology Co., Ltd. from a group of sellers for approximately CNY 200 million on August 28, 2019. The consideration shall be satisfied by issuance of 85.74 million shares of Meitu, Inc. and CNY 47.8 million in cash payable by Xiamen Meitu Network Technology Co., Ltd. Under the terms of the transaction, Meitu, Inc. will acquire 57.09% stake in Dajie Net Hong Kong Limited from a group of sellers through issuance of 85.74 million shares, Xiamen Meitu Network Technology Co., Ltd. will acquire 54.81% stake in Beijing Dajie Zhiyuan Information Technology Co., Ltd. from Horgos Fengmao Equity Investment Management Partnership (Limited Partnership), a fund of Suzhou Northern Light Tengyuan Venture Capital Management Co., Ltd., Ningbo Meishan Bonded Port Area Wenkang Investment Partnership, Ningbo Meishan Bonded Port Area Chengxuan Investment Partnership and other shareholders for nil consideration and Xiamen Meitu Network Technology Co., Ltd. will acquire 20.56% stake in Beijing Dajie Zhiyuan Information Technology Co., Ltd. from a group of shareholders for CNY 47.7 million in cash. Dajie Net Hong Kong Limited and Beijing Dajie Zhiyuan Information Technology Co., Ltd reported net loss after tax of CNY 26.88 million and consolidated net liabilities of approximately CNY 67.19 million. The transaction is subject to approval of Board of Directors of Meitu, Inc., listing committee of the Stock Exchange having granted approval for the listing of, and permission to deal in, the consideration shares, representations and warranties remaining complete and true, transaction documents having been duly executed and delivered by the relevant parties thereto and duly registered with the PRC authorities (where applicable), Dajie Net Hong Kong Limited having adopted an amended and restated memorandum and articles of association, all approvals, consents, permits and/or waivers required by any applicable laws and regulations (including the Listing Rules) or by any third party (including any governmental authorities and the Stock Exchange) necessary for the consummation of the acquisitions having been obtained, Dajie Net Hong Kong Limited and Beijing Dajie Zhiyuan Information Technology Co., Ltd having delivered to Meitu, Inc. or Xiamen Meitu Network Technology Co., Ltd. a certified true copy of the shareholders’ resolutions and board resolutions of each company of the Target Group, and such other documents as necessary to approve the execution of the framework agreement and the transaction documents and the consummation of the transactions, upon closing, there being up to five Directors on the board of Directors of Dajie Net Hong Kong Limited, of which up to three Directors shall be appointed by Meitu, Inc. and up to two Directors shall be appointed by its founder and Meitu, Inc. having received from Pacgate Law Group, PRC legal counsel to Dajie Net Hong Kong Limited, a legal opinion on PRC laws satisfactory to Meitu, Inc. and from Travers Thorp Alberga, Cayman Islands legal counsel to Dajie Net Hong Kong Limited, a legal opinion on the laws of the Cayman Islands satisfactory to Meitu, Inc. Shareholders approval is not required for issuance of consideration shares. The conditions can be waived. Completion shall take place no later than ten business days after the date on which all the conditions precedent have been fulfilled or waived (as the case may be). The consideration shares will be subject to a lock up agreement. If completion does not occur within 90 days after the date of the transaction framework agreement, Meitu, Inc. may terminate the agreement. The transaction is partially completed on November 19, 2019, after the transfer of approximately 85.74 million shares of Meitu, Inc. Jingtian & Gongcheng acted as the legal advisor to Meitu, Inc. Pacgate Law Group and Travers Thorp Alberga acted as the legal advisors to Meitu, Inc. and Dajie Net Hong Kong Limited. Christopher Betts of Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor to Meitu, Inc.