Genworth Financial and China Oceanwide have received approval from Australian regulator for their $2.7bn merger deal.

The companies have also agreed to a fourth waiver and agreement of each party's right to terminate the earlier announced merger deal. 

The fourth waiver and agreement extends the previous deadline of 1 April 2018 to 1 July 2018, and allows more time for regulatory reviews of the transaction.

Genworth stated that the approval from Australian regulator is an important step to complete the merger.

The two companies will continue to engage actively with regulators who are reviewing the transaction in the remaining jurisdictions.

Oceanwide chairman LU Zhiqiang said: "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."

In addition to the extension agreement, the two companies have also acknowledged that the merger may be terminated at any time prior to this July by directors of either of the company, if the Committee on Foreign Investment in the United States (CFIUS) notifies to the companies that the review has been completed and its intentions to recommend that the US President suspend or prohibit the merger from taking place.

Genworth president and CEO Tom McInerney said: "We recently refiled our joint voluntary notice with CFIUS and this merger extension will provide time for that review process, as well as other pending regulatory reviews, to continue. 

"Our CFIUS refiling 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."

Besides obtaining clearance from CFIUS, completion of the transaction remains subject to receiving required regulatory approvals in the US, China and other international jurisdictions in which Genworth has a presence and other closing conditions.

If the transaction with Oceanwide does not close by the maturity of its 6.515% senior unsecured notes due by 22 May, Genworth will use a combination of recently completed term loan proceeds along with some of its cash to fully retire the senior unsecured notes.

The two companies are also discussing other options to reduce the debt, subject to consummation of the merger, to improve Genworth's financial strength over time.

Image: Genworth building in Lynchburg, Virginia USA. Photo: courtesy of Genworth Financial, Inc.