CMB Wing Lung Insurance will issue 9,856,066 new shares to CM Insurance as consideration. CMB Wing Lung Insurance has entered into a business transfer agreement with China Merchants Insurance (CM Insurance), under which the latter agreed to transfer its general insurance business to the former, China Merchants Bank (CMB).
CM Insurance will directly hold 25.37% of the enlarged share capital of CMB Wing Lung Insurance. Shenzhen-headquartered CMB will indirectly hold 74.63%. CM Insurance will also apply to the Insurance Authority of Hong Kong to withdraw its insurance license upon the completion of the deal.
CMB Wing Lung Insurance, established in 1981, and CM Insurance, established in 1986, are local general insurance companies in Hong Kong with a market size in the midstream.
CMB says that the integration will generate synergy in terms of scale, quality and efficiency.
Hong Kong-headquartered China Merchants Group (CM Group) will inject additional capital to enhance the capital strength of CMB Wing Lung Insurance after the integration and significantly improve its underwriting capacity.