In Hangzhou Fanhua Zhixin Insurance Agency and in Zhengzhou Fanhua Anlian Insurance Agency
CNinsure has entered into separate agreements to acquire an additional 41% equity interest in Hangzhou Fanhua Zhixin Insurance Agency and an additional 46% interest in Zhengzhou Fanhua Anlian Insurance Agency, for a total consideration of up to RMB140m.
CNinsure has said that when completed, these acquisitions will bring its total shareholdings in these two agencies to 51% from 10% in Zhixin and 5% in Anlian, respectively, which it already holds. The acquisitions will enable CNinsure to further penetrate Zhejiang Province and expand its market presence to Henan Province.
Pursuant to the agreements, the total considerations for the acquisitions of the additional equity interests in Zhixin and Anlian are RMB100m and RMB40m, respectively which will be paid in cash in nine installments and are subject to a downward adjustment if Zhixin and Anlian fail to achieve certain performance targets.
In addition, the existing shareholders of Zhixin and Anlian undertake that the agencies will contribute certain amount of net profits to CNinsure in 2009, 2010 and 2011. If Zhixin and Anlian fail to achieve the aforementioned targets, these shareholders will transfer part of their equity interests in these agencies back to CNinsure at nominal value.
CNinsure expects to close the transactions in the second quarter of 2009, subject to certain consents, authorisations and other customary closing conditions.
Yinan Hu, chairman and CEO of CNinsure, said: We are excited to have Zhixin and Anlian, together with its strong staff, join CNinsure’s distribution network. These two companies will act as strategic platforms for us to expand our market presence in the regions by acquiring other insurance agencies and recruiting experienced sales agents.