Genworth Extends Merger Deadline Again
March 29, 2018 by Richmond Times- Dispatch (VA)
A long-delayed merger between Henrico County-based insurer Genworth Financial Inc. and China Oceanwide Holdings Group Co. Ltd. is being extended yet again as the proposed deal remains under review by some government regulatory agencies.
Genworth said Tuesday the two companies had agreed to extend the merger deadline for the fourth time, this time from April 1 to July 1.
Genworth, an insurance company with thousands of employees in Virginia, first announced in October 2016 that it had agreed to be acquired by China Oceanwide for $2.7 billion.
However, the merger has faced delays by the Committee on Foreign Investment in the United States, or CFIUS, a federal, multiagency panel that reviews foreign acquisitions of U.S. companies.
The security of U.S. citizens’ personal information has been an issue in the federal regulatory review, and Genworth said in January that it was giving regulators a “mitigation plan” designed to protect its customers’ personal data.
Genworth said Tuesday that it and China Oceanwide have acknowledged that their merger agreement may be terminated at any time prior to July 1, by the board of directors of either company, if CFIUS notifies the companies that it has completed its review and intends to recommend that President Donald Trump suspend or prohibit the merger from taking place.
“We recently refiled our joint voluntary notice with CFIUS and this merger extension will provide time for that review process, as well as other pending regulatory reviews, to continue,” Thomas McInerney, president and CEO of Genworth, said in a statement. “Our CFIUS refiling includes meaningful additions to our mitigation approach to further protect the personal data of Genworth policyholders. We are fully committed to developing a risk mitigation plan that is acceptable to all parties.”
CFIUS has made news recently by rejecting some proposed acquisitions of U.S. companies by China-based firms, including the proposed sale of money-transfer service Moneygram to Ant Financial, an affiliate of Chinese company Alibaba.
Genworth shareholders approved the deal in March 2017, but it also requires approval by multiple state, federal and international regulatory agencies.
Some of those have been cleared, including regulators in Virginia, North Carolina, South Carolina and Vermont. The companies said Tuesday they have received approval from regulators in Australia for the deal.
But the deal still needs approval by state regulators in Delaware.
jblackwell@timesdispatch.com(804) 775-8123
