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Marking a Solid Step Towards Warren Buffett’s Model Acquisition of the Largest Insurance Companies of Portugal with Euro 1 Billion

2014-01-10

(Shanghai, 10 January 2014) Fosun International Limited (“Fosun” or the “Company”, HKEx stock code: 00656) today issued an announcement stating that the Company has been notified that it has won the bid for certain insurance assets of a leading insurance group in Portugal. The bid comprises a proposed acquisition of 80% of the share capital and voting rights of Fidelidade – Companhia de Seguros, S.A. (“Fidelidade”), 80% of the share capital and voting rights of Multicare - Seguros de Saúde, S.A., and 80% of the share capital and voting rights of Cares - Companhia de Seguros, S.A. (altogether, the “Insurance Companies”), all of which are wholly-owned subsidiaries of Caixa Seguros e Saúde, SGPS, S.A.(“CSS”), the insurance arm of a state-owned bank Caixa Geral de Depósitos, S.A. (“CGD”) in Portugal, for an aggregate consideration of Euro1 billion (the “Acquisition”).

In addition, the Company will also acquire shares representing up to 5% of the share capital and voting rights of Fidelidade at the same price it has paid for shares of Fidelidade in the Acquisition, to the extent such shares are not acquired by employees of the Insurance Companies as part of the privatization process. The remainder of the share capital and voting rights of the Insurance Companies (not owned by the Company or employees of the Insurance Companies) will continue to be owned by CSS.

Guo Guangchang, Chairman of Fosun, said “This marks a solid step for Fosun to evolve into Warren Buffett’s model.”

Terms and conditions in relation to the Acquisition will be finalized in the sale and purchase agreement and related ancillary agreements. The parties concerned will enter into the sale and purchase agreement in approximately 30 days from 9 January 2014.

CSS, founded in 1835, is the largest insurance holding company in Portugal. Currently wholly-owned by CGD, it had total assets of Euro 13 billion and net assets of Euro 1.4 billion as at the end of 2012. As the undisputed national champion in the insurance industry of Portugal, CSS combines the leading positions across products in both life and non-life sectors, and owns a diversified and unique distribution platform and a highly recognizable portfolio of brands.


The Company said that, “Fosun has long been striving to become an insurance-oriented investment group with comprehensive financial capabilities. We have been actively identifying different types of value investment opportunities around the world. Portugal is a highly attractive key market and matches well with Fosun’s global expansion strategy. We are also highly concerned and paid attention to other investment opportunities in other sectors of the Portuguese market, in particular the sectors of property, tourism and brand products. Fosun possesses successful experiences of achieving growth together with overseas partners and it is capable of and willing to render assistance to developments of its partners. It endeavors to contribute more to promote economic exchange and cooperation between China and Portugal.”

Fosun believes that, “We always consider development of our insurance segment, the core business that we diligently develop for the future, as an excellent approach to connect its excellent investment capability to premium long-term capital. Organic growth and expansion by acquisition are both effective means to pursue this goal. The Acquisition is another good implementation of Fosun’s investment model of ‘Combining China’s Growth Momentum with Global Resources’ and it will further expand Fosun's insurance business. It will evolve into another milestone in Fosun’s globalization development.”

With vision of becoming an insurance-oriented investment group with comprehensive financial capabilities, Fosun has invested in three insurance companies: Yong’an P&C Insurance, Peak Reinsurance and Pramerica-Fosun Life Insurance. Insurance segment, as Fosun’s one of major core businesses, recorded a good results for its first year. Peak Reinsurance, established in end-2012, its asset management business has successfully adhered to Fosun’s value investing philosophy and recorded an excellent investment return. Yong’an P&C Insurance’s investment return ranked the top among industry, while Pramerica-Fosun Life Insurance has continued to put efforts in its innovative product design capability.

The detailed terms and conditions in relation to the Acquisition are still to be finalized and the Acquisition will be still subject to certain regulatory approvals in Portugal.

 

Background Information:
Fosun pioneered a unique global business model of “combining China’s growth momentum with global resources”.

As far as achieving global development is concerned, Fosun’s edges rest with its deep understanding in China plays an instrumental role in helping global enterprises achieve faster and better development in China. Citing Club Med as an example, Fosun’s active involvement following its investment saw two new Club Med resorts opened in Yabuli of Heilongjiang Province and Guilin of Guangxi Province, respectively. Looking ahead, there will be more Club Med resorts opening in China.

Folli Follie, the Greek enterprise, also has experienced growth brought about by Fosun. Since Fosun’s investment in 2011, Folli Follie’s development in China has been speeding up with higher brand awareness. The total number of points of sales in China exceeded 200 by end-2013, doubled from 98 before Fosun’s investment.

The investment capacities are underpinning Fosun’s multi-industrial operations, allowing it to make accurate judgments on project operations from an investment perspective. In the future, Fosun will continue to take deeper into its roots in China and endeavors relentlessly in global development, striving to become a global financial investment group.

Since the beginning of 2013, Fosun and its managed funds have completed several overseas investment projects: One Chase Manhattan Plaza in the US (US$725 million); the US high-end women apparel brand St. John (US$55 million as the second-largest shareholder); a global medical technology company that designs, develops, manufactures and markets medical and cosmetic devices, Alma Lasers originated in Israel (approximately US$220 million for a 95% interest); as well as the US-based Saladax (Fosun becomes the single largest shareholder through its subscription into the top-up placing of preference shares), which focuses on personalized medication dosage diagnosis and examination. Fosun sees the geographical reach of its investments expand from Europe to North America and the Middle East.

Founded in China, expanded globally and adhered to its roots in China, Fosun believes that its efforts in growing and understanding deeper into China allow it to identify global investment targets more effectively. It is only through this truly global perspective and ability to integrate resources globally and cooperate with the world’s best teams and learn from them that Fosun will be better able to plough deeper into China. This year, Fosun has extended the reach of its investments to Japan, India and Indonesia, etc., with focuses on food, tourism, consumer upgrading and industry upgrading fields.