Fanhua to acquire 51% of equity interests in Zhongji

Fanhua announced that it has signed a definitive agreement with the existing shareholders of Jilin Zhongji Shi’An Insurance Agency to acquire 51% of the equity interests of Zhongji. The transaction is expected to be completed in the first quarter of 2023, subject to certain customary conditions. Pursuant to the agreement, the company will acquire 51% of the equity interests of Zhongji with a stock consideration of up to 683,036 American Depositary Shares. Zhongji is estimated to generate gross written premium of approximately RMB 208M and net income of RMB 15M in 2025, representing a compound annual growth rate of approximately 16% and 44%, respectively, from 2023 to 2025. The stock consideration, adjustable based on the achievement of certain performance targets in the next three years by Zhongji, is subject to a lock-up period of three years and will be released from lock-up in two batches after 2025. Zhongji is the largest insurance agency in Jilin Province, China, which registered over RMB 100M gross written premiums in 2022.