China Taiping Insurance : DISCLOSEABLE AND CONNECTED TRANSACTION RELATING TO THE ISSUANCE OF SHARES BY TPRE DEEMED DISPOSAL OF EQUITY INTEREST IN TPRE

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

(Incorporated in Hong Kong with limited liability)

(Stock Code: 966)

DISCLOSEABLE AND CONNECTED

TRANSACTION RELATING TO THE ISSUANCE

OF SHARES BY TPRE

DEEMED DISPOSAL OF EQUITY INTEREST IN TPRE

FINANCIAL ADVISER TO TPRE

RESULT OF THE PUBLIC TENDER AND THE SUBSCRIPTION

Reference is made to the announcement of the Company dated 17 June 2020 in respect of the potential issuance of shares by Taiping Reinsurance Company Limited, or TPRe, an indirect wholly-owned subsidiary of the Company, by way of the Public Tender.

The Board announces that Ageas Insurance International NV, or Ageas, a wholly-owned subsidiary of ageas SA/NV, a listed international insurance group which offers life and non-life insurance products to customers in European and Asian markets, has been confirmed by SUAEE as the only qualified bidder in accordance with the rules and requirements of the Public Tender.

The Board further announces that on 27 August 2020, TPRe as issuer and Ageas as subscriber entered into the Subscription Agreement, pursuant to which Ageas has conditionally agreed to subscribe for and TPRe has conditionally agreed to allot and issue the Subscription Shares representing approximately 25% of the enlarged issued share capital of TPRe at the Base Consideration, subject to the Compensatory Arrangements.

Following Completion, the issued share capital of TPRe as enlarged by the Subscription will be held as to approximately 75% indirectly by the Company and approximately 25% by Ageas, with TPRe remaining as an indirect non-wholly owned subsidiary of the Company.

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LISTING RULES' IMPLICATIONS

As one or more of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) exceed 5% but all are less than 25%, the Subscription constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules. The Subscription also constitutes a deemed disposal of the Company pursuant to Rule 14.29 of the Listing Rules.

As at the date of this announcement, Ageas holds 24.9% and 20% of the equity interests in TPL and TPAM, respectively, which are non-wholly owned subsidiaries of the Company. Ageas is therefore a connected person of the Company at the subsidiary level, by virtue of being a substantial shareholder of its non-wholly owned subsidiaries. In addition, Ageas also holds 12% of the equity interest in TPFS, an associated company of the Company. As such, the Subscription also constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules.

The Board has approved the Subscription and the independent non-executive Directors have confirmed that the terms of the Subscription are fair and reasonable, on normal commercial terms and in the ordinary and usual course of business of the Group and in the interests of the Company and its shareholders as a whole. Accordingly, the Subscription is exempt from the circular, independent financial advice and shareholders' approval requirements pursuant to Rule 14A.101 of the Listing Rules.

As Completion is conditional upon the fulfilment or waiver (as the case may be) of the conditions precedent as set out under the paragraph headed "Conditions precedent" under the section headed "The Subscription Agreement" in this announcement, the Subscription may or may not proceed. Shareholders and potential investors should exercise caution when dealing in the securities of the Company.

INTRODUCTION

Reference is made to the announcement of the Company dated 17 June 2020 in respect of the potential issuance of shares by TPRe, an indirect wholly-owned subsidiary of the Company, by way of the Public Tender.

The Board announces that Ageas, a wholly-owned subsidiary of ageas SA/NV, a listed international insurance group which offers life and non-life insurance products to customers in European and Asian markets, has been confirmed by SUAEE as the only qualified bidder in accordance with the rules and requirements of the Public Tender.

The Board further announces that on 27 August 2020, TPRe and Ageas entered into the Subscription Agreement, pursuant to which Ageas has conditionally agreed to subscribe and TPRe has conditionally agreed to allot and issue the Subscription Shares representing approximately 25% of the total issued shares of TPRe as enlarged by the Subscription at the Base Consideration, subject to the Compensatory Adjustments (defined below). Details of the Subscription Agreement are set out below.

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THE SUBSCRIPTION AGREEMENT

Date

27 August 2020

Parties

1. TPRe; and
2. Ageas.

Ageas is a company incorporated under the laws of the Netherlands, existing under the laws of Belgium with limited liability, and is part of a listed international insurance group. As one of Europe's larger insurance companies, Ageas concentrates its activities in Europe and Asia through a combination of wholly owned subsidiaries and long-term partnerships with strong financial institutions and key distributors. The company offers life and non-life solutions to retail and business customers. The ultimate beneficial owner of Ageas is ageas SA/NV, a company listed on Euronext Brussels. Ageas is a connected person of the Company at subsidiary level by virtue of holding, directly or indirectly, 24.9% and 20% of the equity interests in TPL and TPAM, respectively, which are both non-wholly owned subsidiaries of the Company. In addition, Ageas also holds 12% of the equity interest in TPFS, an associated company of the Company.

The Subscription

Pursuant to the Subscription Agreement, Ageas has conditionally agreed to subscribe in cash for the Subscription Shares at the Base Consideration, which is subject to compensatory arrangements (the "Compensatory Arrangements") as summarised by primarily, adding to or subtracting from the Base Consideration, 33.3% of the difference in amount between the net asset value of the TPRe Group (i) as at 31 December 2019 and (ii) as recorded in the relevant audited annual financial statements or half-year reviewed financial statements (as applicable) of the TPRe Group as stipulated in the Subscription Agreement on a dollar-for-dollar basis, which shall not exceed or be less than the Base Consideration by 20% unless it is otherwise agreed by the parties after discussions in good faith.

The Subscription Shares will, when fully paid, rank pari passu in all respects with the other shares in issue of TPRe, and free from all encumbrances and together with all rights and benefits attached to the Subscription Shares as at the Completion Date. The Subscription Shares represent approximately 25% of the issued share capital of TPRe as enlarged by the issue of the Subscription Shares immediately after Completion.

The Base Consideration was arrived at after arm's length negotiations between the parties to the Subscription Agreement, with reference to the audited net asset value of TPRe Group as at 31 December 2019 of approximately HK$9,041.4 million.

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Conditions precedent

Completion is conditional upon the fulfilment or waiver (as the case maybe) of the following conditions on or before the Long Stop Date:

1. all necessary consents, regulatory filings, notifications, registrations, disclosures and approvals of the relevant governmental authorities to consummate the transactions contemplated under the Subscription Agreement having being made, fulfilled or obtained, and such consents, regulatory filings, notifications, registrations, disclosures and approvals remaining valid and effective;
2. no governmental authority having granted any order or made any decision that restricts or prohibits the Subscription by Ageas and/or its nominee or other transactions contemplated under any of the transaction documents in relation to the Subscription;
3. no material adverse effect (as more particularly defined in the Subscription Agreement) having occurred;
4. each of TPRe's major warranties being true and correct on and as of the Completion Date by reference to the facts and circumstances existing on the Completion Date (unless such major warranties by their terms speak of an earlier date, in which case they shall be true and correct as of such date);
5. each of TPRe and its subsidiaries having complied with the major pre-completion undertakings pursuant to and in accordance with the Subscription Agreement; and
6. each of Ageas' warranties being true and correct on and as of the Completion Date by reference to the facts and circumstances existing on the Completion Date (unless such Ageas' warranties by their terms speak of an earlier date, in which case they shall be true and correct as of such date).

The conditions under (i) to (iii) may only be waived by mutual written consent of Ageas and TPRe. The conditions under (iv) and (v) may be waived only by Ageas in writing to TPRe. The condition under (vi) may be waived only by TPRe in writing to Ageas.

Completion

Completion shall take place on the fifth business day after the date on which all of the above conditions have been fulfilled or waived or such other date as the parties may agree in writing.

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SHAREHOLDERS' AGREEMENT

At Completion, the Company, EAL, Ageas and TPRe will enter into the Shareholders' Agreement to govern the rights and obligations of the Company, EAL and Ageas in TPRe. The Shareholders' Agreement shall include the following principal terms, among others:

1. the number of directors of TPRe shall be six, with the Company having the right to nominate up to three directors of TPRe, while Ageas shall have the right to nominate one director and one board observer of TPRe. The board of directors of TPRe shall also comprise two independent directors, one designated by each of the Company and Ageas upon recommendation by the nomination and remuneration committee of the board of directors of TPRe, after good faith consultation with each other; and
2. customary shareholder protection rights including anti-dilution rights, rights of first refusal, tag-along rights and consent rights over reserved matters.

REASONS FOR AND BENEFITS OF THE SUBSCRIPTION

The Company and Ageas have a long history of strategic cooperation in life insurance and asset management businesses, and the Subscription marks a further step in this partnership, building on Ageas' previous investments into TPL, TPAM and TPFS. The extended partnership with Ageas will enable the Group to work closely with a highly regarded international partner with both broad experience and expertise in the insurance sector, and deep understanding of the Company's corporate culture and working practices. Specifically, such collaboration in the reinsurance sector is expected to benefit the internationalisation strategies of the Group via TPRe in reinsurance business of European and other Asian markets.

The Subscription will strengthen TPRe's capital base to facilitate the growth of its business in the future. The funds from the Subscription will be utilised for business growth and general working capital of TPRe Group.

Based on the above, the Directors are of the view that the terms of the Subscription Agreement are fair and reasonable and in the interests of the Company its shareholders as a whole.

INFORMATION ON TPRE

TPRe is a company incorporated under the laws of Hong Kong with limited liability. The principal business activities of TPRe Group include non-life and life reinsurance worldwide. With its head office in Hong Kong, TPRe also has operating platforms in the region and overseas, including subsidiaries in Beijing and London, a branch in Labuan as well as a representative office in Japan and Macau.

As at the date of this announcement, TPRe is held as to 100% indirectly by the Company through EAL, a wholly-owned subsidiary of the Company. Following Completion, the issued share capital of TPRe will be held as to approximately 75% indirectly by the Company through EAL and as to approximately 25% by Ageas. TPRe will continue to be a non-wholly owned subsidiary of the Company and its results will remain consolidated in the results of the Group.

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FINANCIAL INFORMATION OF TPRE GROUP

The audited consolidated financial information of TPRe Group for each of the two financial years ended 31 December 2018 and 2019 is set out below:

Year ended 31 December

2019 2018

HK$'000 HK$'000

Profits before taxation	385,336	602,531
Profits after taxation	321,063	539,262

The audited net asset value of TPRe Group as at 31 December 2019 was approximately HK$9,041.4 million.

INFORMATION OF THE GROUP

The principal activity of the Company is investment holding. The principal activities of the Company's subsidiaries are the underwriting of direct life insurance business in the PRC, Hong Kong, Macau and Singapore, direct property and casualty insurance business in the PRC, Hong Kong and overseas, pension and group life business, and all classes of global reinsurance business. The Company's subsidiaries also carry on operations in asset management, insurance intermediary, financial leasing, property investment, securities dealing and brokering business.

FINANCIAL IMPACT OF THE DEEMED DISPOSAL ON THE GROUP

Following Completion, the equity interest of TPRe held by the Company will be reduced from 100% at present to approximately 75% and TPRe will remain as an indirect non wholly-owned subsidiary of the Company and its results will remain consolidated into the results of the Group.

As the deemed disposal will not result in the Company's loss of control over TPRe, the deemed disposal will be accounted for as an equity transaction and will not result in the recognition of any gain or loss in the Company's consolidated statement of profit or loss and other comprehensive income. There will be no material financial impact on the Group resulting from the deemed disposal.

LISTING RULES' IMPLICATIONS

As one or more of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) exceed 5% but all are less than 25%, the Subscription constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules. Following Completion, the Company's interest in TPRe will be diluted and therefore the Subscription also constitutes a deemed disposal of the Company pursuant to Rule 14.29 of the Listing Rules.

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As at the date of this announcement, Ageas holds 24.9% and 20% equity interest in TPL and TPAM, respectively, which are non-wholly owned subsidiaries of the Company. Ageas is therefore a connected person of the Company at the subsidiary level, by virtue of being a substantial shareholder of its non-wholly owned subsidiaries. In addition, Ageas also holds 12% of the equity interest in TPFS, an associated company of the Company. As such, the Subscription also constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules.

The Board has approved the Subscription and the independent non-executive Directors have confirmed that the terms of the Subscription are fair and reasonable, on normal commercial terms and in the ordinary and usual course of business of the Group and in the interests of the Company and its shareholders as a whole. Accordingly, the Subscription is exempt from the circular, independent financial advice and shareholders' approval requirements pursuant to Rule 14A.101 of the Listing Rules.

None of the Directors has a material interest in the transactions contemplated under the Subscription nor is required to abstain from voting from the Board resolutions for considering and approving the same pursuant to the articles of association of the Company.

As Completion is conditional upon the fulfilment or waiver (as the case may be) of the conditions precedent as set out under the paragraph headed "Conditions precedent" under the section headed "The Subscription Agreement" in this announcement, the Subscription may or may not proceed. Shareholders and potential investors should exercise caution when dealing in the securities of the Company.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following terms have the following meanings:

"Ageas"	Ageas Insurance International NV, a company incorporated
	under the laws of the Netherlands and existing under the
	laws of Belgium
"associate"	has the meaning as defined in the Listing Rules
"Base Consideration"	HK$3,100 million
"Board"	the board of directors of the Company
"Company"	China Taiping Insurance Holdings Company Limited, a
	company incorporated in Hong Kong with limited liability,
	the shares of which are listed on the main board of the Stock
	Exchange
"Compensatory Arrangements"	has the meaning as defined under the paragraph "The
	Subscription" in this announcement
"Completion"	completion of the Subscription
"Completion Date"	the date on which Completion takes place
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"connected person(s)"	has the meaning as defined in the Listing Rules
"Director(s)"	director(s) of the Company
"EAL"	Effectual Assets Limited, a company incorporated in the
	British Virgin Islands with limited liability and an indirect
	wholly-owned subsidiary of the Company
"Group"	the Company and its subsidiaries
"Hong Kong"	the Hong Kong Special Administrative Region of the PRC
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock
	Exchange
"Long Stop Date"	27 August 2021, with an automatic extension of three
	months where further time is required for satisfaction of
	condition precedent (i) under the paragraph "Conditions
	precedent" in this announcement
"PRC"	The People's Republic of China, for the purpose of this
	announcement, excluding Hong Kong, the Macau Special
	Administrative Region of the PRC and Taiwan
"Public Tender"	the process of a public tender on the SUAEE in relation to
	the potential issuance of shares, representing approximately
	25% of the issued share capital of TPRe as enlarged by the
	potential issuance, by TPRe to external investor(s)
"Shareholders' Agreement"	the shareholders' agreement among the Company, EAL,
	Ageas and TPRe
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"SUAEE"	The Shanghai United Asset Equity Exchange Co., Ltd
"Subscription"	the subscription of the Subscription Shares by Ageas in
	accordance with the terms and conditions of the Subscription
	Agreement
"Subscription Agreement"	the subscription agreement dated 27 August 2020 entered
	into between TPRe and Ageas in relation to the Subscription
"Subscription Shares"	19,270,333 new shares of TPRe to be allotted and issued by
	TPRe and subscribed for by Ageas
"TPAM"	Taiping Asset Management Company Limited, a company
	established in the PRC with limited liability and a subsidiary
	of the Company owned (directly or indirectly) as to 80% by
	the Company and as to 20% by Ageas as at the date of this
	announcement

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"TPFS"	Taiping Financial Services Company Limited, a company
	established in the PRC with limited liability and is held
	(directly or indirectly) as to 48% by the Company as to 12%
	by Ageas as at the date of this announcement
"TPL"	Taiping Life Insurance Company Limited, a company
	established in the PRC with limited liability and a subsidiary
	of the Company owned (directly or indirectly) as to 75.1%
	by the Company and as to 24.9% by Ageas as at the date of
	this announcement
"TPRe"	Taiping Reinsurance Company Limited, a company
	incorporated in Hong Kong with limited liability
"TPRe Group"	TPRe and its subsidiaries
"HK$"	Hong Kong dollars, the lawful currency of Hong Kong
"%"	per cent

By Order of the Board

China Taiping Insurance Holdings Company Limited

ZHANG Ruohan

Company Secretary

Hong Kong, 27 August 2020

As at the date of this announcement, the Board comprises 12 directors, of which Mr. LUO Xi, Mr. WANG Sidong, Mr. HONG Bo and Mr. XIAO Xing are executive directors, Mr. GUO Zhaoxu, Mr. HU Xingguo, Ms. ZHANG Cui and Mr. YANG Changgui are non-executive directors, and Dr. WU Jiesi, Mr. ZHU Dajian, Mr. WU Ting Yuk Anthony and Mr. XIE Zhichun are independent non-executive directors.

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