To strengthen its capacity to distribute property and casualty insurance products
CNinsure, an independent insurance intermediary company operating in China, has agreed to acquire an additional 41% equity interest in Hebei Fanlian Insurance Agency, an insurance agency primarily engaged in the distribution of property and casualty (P&C) insurance products in Hebei Province.
On the completion of the transaction, the company’s total shareholdings in Hebei Fanlian will be increased to 51% from the 10% it previously held.
Pursuant to the terms of the acquisition, the selling shareholder of Fanlian is obligated to pay back part of the consideration, and transfer part of its equity interest in Hebei Fanlian to CNinsure at nominal value if Hebei Fanlian fails to fulfill the guaranteed targets relating to net income, number of sales agents and monthly premiums written.
Yinan Hu, chairman and CEO of CNinsure, said: “Our partnership with Hebei Fanlian will greatly strengthen our capacity to distribute P&C insurance products. Hebei Fanlian, together with two of our existing operating entities in Hebei, will help us further penetrate into Hebei Province and enhance our competitiveness in this region.”
The transaction is expected to close in the first quarter of 2010, subject to certain consents, authorizations and other customary closing conditions.