Oceanwide-Genworth deal runs into trouble … again

Almost a year after it was announced, planned merger has yet to receive go-ahead from regulator

Oceanwide-Genworth deal runs into trouble … again

Insurance News

By Gabriel Olano

China Oceanwide Holdings Group is facing yet another obstacle in its planned US$2.7 billion acquisition of US-based insurer Genworth Financial.

The deal has been in limbo for almost a year since it was announced in late October 2016, as both firms are reportedly having a hard time convincing US Federal regulators to greenlight the transaction.

On Monday, the firms jointly announced that they are expecting another delay and they will need to take additional mitigation steps in order to receive the regulator’s nod, according to a report by American newspaper Richmond Times-Dispatch. Genworth’s chief executive also said that the firm is “evaluating options” in case the deal is unable to be completed.

The transaction is undergoing a review by the Committee on Foreign Investment in the United States (CFIUS), a joint committee of federal agencies that examines proposed transactions which will result in a foreign entity taking control of a US business.

Both parties have already twice withdrawn and refiled their joint voluntary statement to CFIUS, in order to answer the regulator’s questions and give it more time to examine the deal.

Among the mitigation steps proposed by the companies is working with a US-based third-party service provider.

“We continue to work diligently to secure all required regulatory approvals necessary to complete the transaction,” said Tom McInerney, president and CEO of Genworth, in a statement.

Meanwhile, Lu Zhiqiang, chairman of Oceanwide, added: “We are … working hard with them to find ways to successfully complete the transaction as soon as possible.”

Related stories:
Oceanwide’s acquisition of Genworth inching closer to completion
China Oceanwide’s acquisition of US-based Genworth hits snag
Genworth shareholders agree to $2.7 billion acquisition by China Oceanwide

Keep up with the latest news and events

Join our mailing list, it’s free!