Genworth Financial to be acquired by private Chinese firm in $2.7 billion all-cash deal

A Chinese firm will take over Henrico-based Genworth Financial in a deal worth $2.7 billion, it was announced late Sunday night. China Oceanwide Holdings Group Co., Ltd. and Genworth have entered into a definitive agreement under which China Oceanwide has agreed to acquire all of the outstanding shares of Genworth for a total transaction value of approximately $5.43 per share in cash.

As part of the transaction, China Oceanwide has additionally committed to contribute to Genworth $600 million of cash to address the debt maturing in 2018, on or before its maturity, as well as $525 million of cash to the U.S. life insurance businesses.

“The China Oceanwide transaction is the result of an active and extensive review process conducted over the past two years under the supervision of the Board and with guidance from external financial and legal advisors,” said James Riepe, non-executive chairman of the Genworth Board of Directors. “The Board is confident that the sale of the company to China Oceanwide is the best path forward for Genworth’s stockholders.”

Upon the completion of the transaction, 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 the Near West End. Day-to-day operations are not expected to change as a result of the transaction.

China Oceanwide is a privately held, family owned international financial holding group founded by Lu Zhiqiang. Headquartered in Beijing, China, China Oceanwide’s diversified businesses include operations in financial services, energy, culture and media, and real estate assets globally, including in the United States. The company has more than 10,000 employees globally across its subsidiaries.

“Genworth is an established leader in both mortgage insurance and long term care insurance, which are markets that present significant long-term growth opportunities,” added Mr. Lu, Chairman of China Oceanwide. “We are impressed by Genworth’s purpose and its focus on helping people manage the financial challenges of aging as well as achieving the dream of homeownership.”

“We believe that this transaction creates greater and more certain stockholder value than our current business plan or other strategic alternatives, and is in the best interests of Genworth’s stockholders,” Tom McInerney, President & Chief Executive Officer of Genworth, concluded. “China Oceanwide is an ideal owner for Genworth going forward. They recognize the strength of our mortgage insurance platform and the importance of long term care insurance in addressing an aging population. The capital commitment from China Oceanwide will strengthen our business and increase the likelihood of obtaining regulatory approval.”

The transaction, which has been approved by both companies’ boards of directors, is expected to close by the middle of 2017, subject to the requisite approval by Genworth’s stockholders as well as certain other closing conditions, including the receipt of regulatory approvals. Both China Oceanwide and Genworth have initiated discussions with regulators in key jurisdictions.