GUANGZHOU, China, March 26, 2011 (GLOBE NEWSWIRE) -- CNinsure Inc. (Nasdaq:CISG) (the "Company" or "CNinsure"), a leading independent insurance intermediary company operating in China, today announced that it has reached definitive agreements to sell its 55% equity interest in Beijing Fanhua Datong Investment Management Co., Ltd. ("Datong") to Winner Sight Global Limited, an affiliated entity of Warburg Pincus LLC.
The cash consideration for the sale is approximately USD63.69 million. In addition, Datong agreed to pay a cash dividend of RMB10 million exclusively to CNinsure. The transaction has been completed on March 25, 2011.
Datong, in which CNinsure acquired 55% equity interest for RMB220 million in the fourth quarter of 2008, was primarily engaged in the distribution of life insurance products. Net revenues and net income derived from Datong for fiscal year 2010 were RMB251.1 million and RMB29.7 million, respectively, representing 16.9% and 7.0% of the Company's total net revenues and net income attributable to shareholders, respectively.Commenting on the sale of Datong, Mr. Yinan Hu, CNinsure's chairman and chief executive officer, stated, "We started our life insurance distribution business by building a Life Insurance Business Unit in 2006 and established Datong Life Business Unit in 2008 by acquiring 55% stake in Datong. Over the past two years, both of our life insurance business units have achieved astonishing growth. However, the difference in the two business units' business philosophies and corporate cultures has been increasingly presenting challenges to us in resources allocation. Therefore, in order to avoid potential internal friction and streamline our business structure for more effective management and resources allocation, we decided to sell all the equity interest we hold in Datong. "The sale of Datong will not lead to any change in our growth strategies. Life insurance business remains to be our strategic focus. We will continue to strengthen our investment in the life insurance business to increase its contribution to the Company."
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