CNinsure Signed Agreement to Acquire 55% of a Life Insurance Intermediary Company for RMB220 Million
September 18 2008 - 8:46AM
PR Newswire (US)
GUANGZHOU, Sept. 18 /Xinhua-PRNewswire-FirstCall/ -- CNinsure Inc.
(NASDAQ:CISG), a leading independent insurance intermediary company
operating in China, today announced that it has signed a definitive
agreement to acquire 55% equity interests in Beijing Fanhua Datong
Investment Management Co., Ltd. ("Datong"), an insurance
intermediary company operating nationally and headquartered in
Beijing, for a total consideration of RMB220 million. CNinsure
expects to close the transaction in the fourth quarter of 2008,
subject to certain consents, authorizations and other customary
closing conditions. Pursuant to the agreement, the existing
shareholders of Datong undertake that Datong will contribute
certain amount of net profits to CNinsure in 2009 and 2010. If
Datong fails to achieve the net profit contribution targets, these
shareholders will transfer part of their equity interests in Datong
to CNinsure at nominal value. In addition, the existing
shareholders also undertake to establish 90 sales teams with 3300
productive sales agents and achieve certain premium targets before
2011. Datong's existing shareholders will receive the total
consideration in 10 installments while the consideration is subject
to adjustment if Datong fails to achieve the aforementioned targets
relating to sales teams, sales agents and premiums. Datong, which
specializes in life insurance distribution, was founded by a team
of professionals led by its chairman and general manager, Mr.
Keping Lin, who was formerly a vice president of New China Life
Insurance Company Limited ("New China Life"), China's fifth largest
life insurer. Mr. Lin managed sales and business development of New
China Life's branches nationwide from 2004 until 2008, when he left
New China Life to set up Datong. From 2001 to 2004, he held various
management positions at New China Life, including assistant
president and general manager of the Beijing branch and Guangdong
branch. Prior to joining New China Life, he worked at Ping An Life
Insurance Company of China from 1997 to 2001, first serving as
general manger of the Changsha branch and later general manager of
the personal life insurance division. Previously, he was mayor of
Yongzhou, Hunan Province in southern China. The other key members
of Datong's management team also held management positions at New
China Life before joining Datong. They collectively have extensive
insurance industry experience encompassing corporate insurance
business, distribution channel management, subsidiary management,
sales management and financial management. Commenting on this
acquisition, CNinsure's Chairman and Chief Executive Officer, Yinan
Hu, stated, "The acquisition of Datong will expedite the expansion
of our life insurance distribution network and contribute
significantly to the achievement of our life insurance revenue
targets. What has attracted us most is Datong's management team,
particularly their extensive experience in life insurance
distribution and their broad business relationships in the life
insurance sector." "We hope that the joining of Mr. Lin and his
team will encourage more talented professionals to venture into the
insurance intermediary sector. We believe that CNinsure, as a
leading insurance intermediary company, stands to continuously
benefit from this trend," he added. About CNinsure Inc. CNinsure is
a leading independent insurance agency and brokerage company
operating in China. CNinsure's distribution network reaches many of
China's most economically developed regions and affluent cities.
The Company distributes a wide variety of property and casualty and
life insurance products underwritten by domestic and foreign
insurance companies operating in China, and provides insurance
claims adjusting as well as other insurance- related services.
Forward-looking Statements This press release contains statements
of a forward-looking nature. These statements are made under the
"safe harbor" provisions of the U.S. Private Securities Litigation
Reform Act of 1995. You can identify these forward- looking
statements by terminology such as "will," "expects," "believes,"
"anticipates," "intends," "estimates" and similar statements. Among
other things, the management's quotations contain forward-looking
statements. These forward-looking statements involve known and
unknown risks and uncertainties and are based on current
expectations, assumptions, estimates and projections about CNinsure
and the industry. Potential risks and uncertainties include, but
are not limited to, those relating to CNinsure's limited operating
history, especially its limited experience in selling life
insurance products, its ability to attract and retain productive
agents, especially entrepreneurial agents, its ability to maintain
existing and develop new business relationships with insurance
companies, its ability to execute its growth strategy, its ability
to adapt to the evolving regulatory environment in Chinese
insurance industry, and its ability to compete effectively against
its competitors. All information provided in this press release is
as of September 18, 2008, and CNinsure undertakes no obligation to
update any forward-looking statements to reflect subsequent
occurring events or circumstances, or to changes in its
expectations, except as may be required by law. Although CNinsure
believes that the expectations expressed in these forward-looking
statements are reasonable, it cannot assure you that its
expectations will turn out to be correct, and investors are
cautioned that actual results may differ materially from the
anticipated results. Further information regarding risks and
uncertainties faced by CNinsure is included in CNinsure's filings
with the U.S. Securities and Exchange Commission, including its
annual report on Form 20-F. DATASOURCE: CNinsure Inc. CONTACT:
Phoebe Meng, IR Officer, +86-20-6122-2777, or ; or Oasis Qiu,
+86-20-6122-2777 x850, or
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