Genworth and China Oceanwide extend target closing date for deal

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China Oceanwide's acquisition of Genworth has been postponed until March, prolonging uncertainty about the fate of the acquired company's U.S. private mortgage insurance unit that could be resolved by the deal.

The acquisition, which was previously scheduled to close Thursday, is now set to close March 15. It has been delayed by the lack of necessary approvals from the U.S. Financial Industry Regulatory Authority and Canadian regulators. The transaction also still lacks clearance in China for currency conversion and the transfer of funds involved.

"We are pleased with the momentum we've recently achieved with the receipt of required approvals by all of our state regulators, the countries of Australia and New Zealand, and the U.S. government-sponsored enterprises — Fannie Mae and Freddie Mac," Tom McInerney, president and CEO of Genworth, said in a press release. "In the meantime, we continue to be actively engaged with FINRA and the Canadian government as they review our transaction."

The closing of the deal, which the two companies originally agreed to in 2016, now been postponed eight times. China Oceanwide remains committed to closing the transaction, according to the release.

There has been concern that Genworth's U.S. PMI subsidiary could be sold or spun off separately if the deal failed to receive all the regulatory approvals it needs to close.

In the United States, almost two-thirds of borrowers who have GSE loans with PMI are first-time homebuyers, a key market segment for lenders, according to data from Fannie and Freddie compiled by mortgage insurance trade group USMI.

Genworth's stock peaked at around $5 per share in January after key New York regulatory approvals for the deal came through. Its average price for the month has been closer to $4.80 per share.

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