China Oceanwide to buy US insurer Genworth Financial for $2.7 bn
24 October 2016
China Oceanwide Holdings, a Beijing-based holding firm founded by Chinese businessman Lu Zhiqiang, yesterday struck a deal to buy US insurer Genworth Financial Inc for $2.7 billion in cash.
Under the terms of the deal, China Oceanwide will pay $5.43 per share, a 4.2 per cent premium to Genworth's Friday closing price.
China Oceanwide has also agreed to commit another $1.12 billion towards Genworth debt maturing in 2018 and life insurance claims charges.
The acquisition, which will be carried out through China Oceanwide's investment unit, Asia Pacific Global Capital Co, is subject to approval by Genworth's stockholders as well as regulatory approvals.
Post closing, Genworth will be a standalone subsidiary of China Oceanwide and Genworth's senior management team will continue to lead the business from its current headquarters in Richmond, Virginia.
Genworth intends to maintain its existing portfolio of businesses, including its MI businesses in Australia and Canada.
Genworth's day-to-day operations are not expected to change as a result of this transaction.
Genworth, a Fortune 500 insurance company, was founded as The Life Insurance Company of Virginia in 1871.
It deals in mortgage insurance in the US, Canada and Australia, and US life insurance business. It offers its products and services through financial intermediaries, advisors, independent distributors, and sales specialists.
China Oceanwide is family owned international financial holding group with diversified businesses that include operations in financial services, energy, culture and media, and real estate assets globally, including in the US.
China Oceanwide is the controlling shareholder of the Shenzhen-listed Oceanwide Holdings Co., and Minsheng Holdings Co. Ltd; the Hong Kong-listed China Oceanwide Holdings Limited; the privately-held Minsheng Securities, Minsheng Trust, and Asia-Pacific Property & Casualty Insurance.
It is also the single largest shareholder of Australia-listed CuDECO Ltd and a minority investor in Shanghai-listed China Minsheng Bank and Hong Kong-listed Legend Holdings.
In the US, China Oceanwide has real estate investments in New York, California, and Hawaii.