The New York State Department of Financial Services (NY DFS) has approved China Oceanwide’s $2.7bn proposed acquisition of Virginia-based insurance firm Genworth Financial, making it the final insurance regulatory approval.
Image: Genworth location in Lynchburg, Virginia. Photo: courtesy of Genworth Financial, Inc.
The New York regulator approved the proposed acquisition by Oceanwide affiliates of New York-domiciled Genworth Life Insurance, which is part of the larger transaction.
It follows last week’s reapproval from the Virginia State Corporation Commission, Bureau of Insurance of the proposed acquisition of control by the Chinese insurance firm of Genworth’s Virginia-based insurance companies – Genworth Life and Annuity Insurance and Jamestown Life Insurance.
Announced in October 2016, the Genworth Oceanwide merger had faced regulatory obstacles for its closing. Originally, the closing of the transaction was expected to occur in 2017.
As of now, the closing of the deal continues to remain subject to other conditions, such as receipt of required regulatory approvals in China, Canada and from the US Financial Industry Regulatory Authority (FINRA).
The two parties are said to be engaged actively with the relevant regulators pertaining to their pending applications. In June 2018, the two firms extended their merger agreement to 31 January, 2019 to give additional time for regulatory review of the deal.
Last year, the proposed merger was approved in Australia.
As part of the latest approval from NY DFS, Genworth and Oceanwide entered into a letter agreement with the New York regulator to acknowledge certain additional requirements associated with cyber-security matters and the protection of customer personally identifiable information.
The parties, in a statement, said: “These requirements are consistent with the Enhanced Data Security Program that Genworth and Oceanwide have undertaken in connection with the clearance of the transaction by the Committee on Foreign Investment in the United States.”
As per the terms of the deal, Oceanwide agreed to buy all the Genworth’s shares at $5.43 per share in cash. The Chinese firm had also agreed to contribute an additional $600m of cash to the US insurance firm to address its debt maturing in 2018, on or before its maturity, along with $525m of cash to the US life insurance businesses.