CNinsure to Acquire Additional Interests in Two Insurance Agencies
March 31 2009 - 7:45AM
PR Newswire (US)
GUANGZHOU, China, March 31 /PRNewswire-Asia-FirstCall/ -- CNinsure
Inc. (NASDAQ:CISG), a leading independent insurance intermediary
company operating in China, today announced that it has entered
into separate agreements to acquire an additional 41% equity
interest in Hangzhou Fanhua Zhixin Insurance Agency Co., Ltd.
("Zhixin") and an additional 46% interest in Zhengzhou Fanhua
Anlian Insurance Agency Co., Ltd. ("Anlian"), for a total
consideration of up to RMB140 million. When completed, these
acquisitions will bring CNinsure's 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. Zhixin, headquartered in Hangzhou, capital city
of Zhejiang Province, is primarily engaged in the distribution of
property and casualty ("P&C") insurance products. After the
acquisition, Zhixin's founder Tingxin Zhang will continue to lead
the company, together with his team of insurance agents who have
been working under him for over three years, during which he had
successfully run another leading P&C insurance agency in the
region. Mr. Zhang is currently serving as secretary of the Zhejiang
Insurance Intermediary Association. Anlian, headquartered in
Zhengzhou, capital city of Henan Province, also specializes in the
distribution of P&C insurance products. It was founded by a
20-year insurance industry veteran, Jun Zhang. Prior to Anlian, Mr.
Zhang held various managerial positions at PICC Property and
Casualty Company Limited. He and his team will also stay on with
the company after the acquisition as minority shareholders in
charge of day-to-day operations. Pursuant to the agreements, the
total considerations for the acquisitions of the additional equity
interests in Zhixin and Anlian are RMB100 million and RMB40
million, 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, authorizations
and other customary closing conditions. Commenting on the
acquisition, CNinsure's Chairman and Chief Executive Officer, Yinan
Hu stated, "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." About CNinsure
Inc. CNinsure is a leading independent intermediary 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 and the Business Outlook
section 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 the Chinese insurance industry, its ability to
compete effectively against its competitors, quarterly variations
in its operating results caused by factors beyond its control and
macroeconomic conditions in China and their potential impact on the
sales of insurance products. All information provided in this press
release is as of March 31, 2009, 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:
Oasis Qiu, IR Officer, +86-20-6122-2777 x850, or
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