As per the deal announced in October 2016, Oceanwide, through its investment platform Asia Pacific Global Capital, will acquire Genworth Financial for $5.43 per share in cash
Oceanwide gets closer in completing its $2.7bn acquisition of Genworth Financial. (Credit: Genworth Financial, Inc.)
The $2.7bn merger between China Oceanwide and Genworth Financial is finally expected to be closed this month-end, nearly four years after the deal was announced.
Genworth Financial said that its board of directors and management team determined that the Chinese firm has given them satisfactory information about its funding plan for the purchase price consideration. Following this, the US insurer has decided not to exercise its right to scrap the merger agreement as of 31 August 2020.
Genworth Financial CEO comments on the developments
Genworth Financial president and CEO Tom McInerney said: “We are pleased with the progress Oceanwide has made towards securing the financing necessary to fund the transaction, which we continue to believe represents the best value for Genworth’s shareholders.
“The August 31st milestone was important to both inform Genworth’s ongoing review process as well as provide an important update to our shareholders ahead of the September 30, 2020 deadline, particularly in light of the market disruptions driven by the global pandemic.”
The proposed merger has all the regulatory approvals in the US in place that are required for its closing, said the American insurance holding firm.
Genworth Financial said that it is awaiting confirmation from the Delaware Department of Insurance that the acquisition of its Delaware-domiciled insurer can move ahead under the existing approval. The US insurance company said that Oceanwide expects to seek the confirmation of the same upon finalisation of its financing.
Oceanwide chairman LU Zhiqiang said: “We believe there is significant future value in bringing long term care (LTC) insurance expertise to China and the rest of Asia, and thus remain committed to the transaction.
“We are pleased that, despite the constraints imposed by the global pandemic, we have been making very good progress to finalize the financing plan so that we can meet the September 30, 2020 closing date.”
As per the deal announced in October 2016, Oceanwide will acquire Genworth Financial for $5.43 per share in cash through its investment platform Asia Pacific Global Capital. Upon the closing of the deal, the US insurance firm is expected to operate as a standalone subsidiary of the Chinese financial holding group besides retaining its current headquarters in Richmond, Virginia.