CNinsure has signed definitive agreements to acquire additional 41% equity interests in Shandong Mintai Insurance Agency and Ningbo Baolian Insurance Agency, bringing its total shareholdings in these two agencies to 51% from the 10% it previously held.
Under the agreements with the selling shareholders, the total considerations for the acquisitions are subject to downward adjustment, and CNinsure’s shareholdings in the two agencies will be adjusted upwards if the agencies fail to achieve certain operational and financial targets.
In addition, the selling shareholders also agree that all of Mintai’s and Baolian’s net income from 2010 to 2014 will be distributed to CNinsure.
Yinan Hu, chairman and CEO of CNinsure, said: “The addition of these two agencies will greatly strengthen our capacity for insurance product distribution in Shandong and Zhejiang provinces, help us further penetrate into these two provinces and enhance our competitiveness.”
The transaction is expected to close in the second quarter of 2010, subject to certain consents, authorizations and other customary closing conditions.