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Genworth and Oceanwide extend merger deal

Published 29 June 2018

Genworth Financial and China Oceanwide Holdings Group (Oceanwide) have agreed to a fifth waiver and agreement to terminate the previously announced merger agreement. 

This fifth waiver and agreement extends the previous deadline of 1 July to 15 August this year, to allow additional time for continued regulatory review of the transaction.

The extension will also allow Oceanwide and Genworth to further develop the previously announced new capital investment plan whereby Oceanwide would contribute an aggregate of $1.5bn to Genworth over time following the closing of the transaction.  

The contribution would be used to further improve Genworth's financial stability, which could include retiring Genworth's debt due in 2020 and 2021 or enabling future growth opportunities.

As previously announced, the parties are seeking approval of a transaction with no unstacking of Genworth Life and Annuity Insurance Company from Genworth Life Insurance Company and Genworth's debt obligations due May 2018 were refinanced with the proceeds from a term loan and cash on hand.  As a result, Oceanwide will no longer make the previously committed capital contributions that were intended to facilitate the unstacking and address Genworth's 2018 debt maturity.

Genworth and Oceanwide continue to work closely with regulators who must approve the transaction in the US, China and other international jurisdictions in which Genworth does business. 

Genworth president and CEO Tom McInerney said: "Genworth and Oceanwide continue to be committed to the transaction and are pleased to have turned our attention to obtaining the remaining regulatory approvals, now that the Committee on Foreign Investment in the United States has completed its review of our transaction.

"We recognize this process will likely extend beyond August 15."

Oceanwide chairman LU Zhiqiang said: "We are encouraged by the good progress we are making and are focused on working with Genworth to obtain the remaining required regulatory approvals, with the goal of closing the transaction as soon as possible."

Source: Company Press Release