The acquisition is part of the larger $2.7bn merger deal signed in October 2016 between Oceanwide and GLICNY’s parent firm Genworth Financial
Oceanwide gets closer in completing its $2.7bn acquisition of Genworth Financial. (Credit: Genworth Financial, Inc.)
Genworth Financial and China Oceanwide have secured reapproval for their transaction from the New York State Department of Financial Services (NYDFS).
The reapproval pertains to a proposed acquisition by certain affiliates of China Oceanwide of Genworth Life Insurance Company of New York (GLICNY). The acquisition is part of the larger $2.7bn merger deal signed in October 2016 between the Chinese insurance group and GLICNY’s parent firm Genworth Financial.
NYDFS’ original approval for Oceanwide’s acquisition of control of the New York-domiciled insurance company expired in March 2019. The larger deal, which involves the Chinese insurer’s acquisition of Genworth Financial, is yet to be finalised owing to various regulatory delays and other factors.
However, the parties have now moved closer in wrapping up their deal following the reapproval in New York state. Both the firms are currently in talks for a short extension of their merger agreement beyond the current deadline of 31 March 2020.
With regard to reapproval from NYDFS, Genworth Financial had agreed to contribute $100m to GLICNY upon completion of the Oceanwide transaction.
The Genworth Financial-Oceanwide merger had previously secured all the necessary approvals from US regulators. However, the companies filed supplementary information in late 2019 to certain regulators to cover details about the divestiture of Genworth Canada and the passage of time since their earlier approvals.
Currently, Oceanwide is said to be working on giving responses to limited regulatory requests for additional information as soon as possible.
Closing of Oceanwide, Genworth merger could be delayed due to coronavirus outbreak
Genworth stated: “Given the ongoing challenges due to the coronavirus pandemic, including the remote work policies that have been put into effect for the parties and regulators involved, the submission of additional information and the review processes have taken and may continue to take more time than would ordinarily be expected.”
The company said that once the issues are resolved, Oceanwide is expected to be in a position to seek clearance in China for the currency conversion and transfer of funds in order to wrap up the merger.