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China Online Education Group to Spin off China Mainland Business.

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MANews-(C)2009-2022

Beijing-based online education platform China Online Education Group (NYSE: COE), with core expertise in English education, has entered into a definitive share purchase agreement with Dasheng Holding (HK) Ltd, an entity controlled by COE CEO and chairman Jiajia Jack Huang, under which Jiajia Jack Huang, through Dasheng, will acquire all of the company's online English tutoring businesses in the China mainland, including all associated liabilities and assets, for USD 1, the company said.

The China Mainland Business is conducted by the subsidiaries of and variable interest entities controlled by China Online Education limited, which is in turn a wholly-owned subsidiary of the company. Pursuant to the Share Purchase Agreement, Dasheng will acquire all of the equity interests of COE HK from the company.

After the closing of the transaction, Dasheng will grant a right to the company to purchase certain newly issued shares of up to 99% of the outstanding shares of the entities holding the China Mainland Business with an exercise price of USD 1.

The warrant may be exercised within five years from the Closing, subject to applicable laws of China and requirements of the competent government authorities.

The board, acting upon the unanimous recommendation of a committee of two independent and disinterested directors established by the board, approved the Share Purchase Agreement and the Transaction.

The Special Committee negotiated the terms of...

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