Genworth and Oceanwide extend $2.7bn merger agreement
Genworth Financial, a US-based insurance holding company, and China Oceanwide Holdings Group have agreed to a fourth waiver and agreement of each party's right to terminate the previously announced merger.
The companies first unveiled the deal in Oct. 2016 that would see the Chinese company buy Genworth for $2.7 billion.
The new agreement extends the previous deadline of April 1 to July 1, 2018, and allows additional time for regulatory reviews of the transaction.
The companies have received approval from regulators in Australia, in addition to Virginia, North Carolina, South Carolina and Vermont. However, the closing of the transaction remains subject to the receipt of required regulatory approvals in the US, China and other international jurisdictions.
Oceanwide is a privately held, family-owned international financial holding group headquartered in Beijing, China. Oceanwide's businesses include operations in financial services, energy, culture and media, and real estate assets globally, including in the United States.
In the event that the transaction with Oceanwide does not close by the maturity of its 6.515 percent senior unsecured notes due May 22, 2018, Genworth will use a combination of the recently completed term loan proceeds plus some level of holding company cash to fully retire such senior unsecured notes. Genworth and Oceanwide are also discussing other options for reducing debt, subject to consummation of the merger, to improve Genworth's financial flexibility and ratings over time.
Tom McInerney, president and CEO of Genworth, said: "We recently re-filed our joint voluntary notice with CFIUS (Committee on Foreign Investment in the United States) and this merger extension will provide time for that review process, as well as other pending regulatory reviews, to continue.
"Our CFIUS re-filing includes meaningful additions to our mitigation approach to further protect the personal data of Genworth policyholders. We are fully committed to developing a risk mitigation plan that is acceptable to all parties."
McInerney added: "Approval by Australia is an important step in the process of completing the merger with Oceanwide. Genworth and Oceanwide continue to be actively engaged with regulators who are reviewing our transaction in the remaining jurisdictions that must approve the transaction."
Added LU Zhiqiang, chairman of Oceanwide, commented: "We are pleased that our transaction has been approved by Australia and are committed to diligently working with Genworth to obtain the remaining regulatory approvals and satisfy other conditions necessary to close the transaction."
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