Genworth working on data protection plan to get merger approval
Genworth Financial's acquisition by a Chinese insurance company, which has already been delayed several times, might be in peril following the failure of another cross-border merger to gain approval.
The deal is on hold because of consumer data protection concerns, Genworth said in a press release.
On Jan. 2, MoneyGram terminated its agreement to be acquired by a Chinese company, Ant Financial, following its inability to obtain CFIUS approval for the transaction. President Trump expressed opposition to such deals during the election campaign.
Back in October Genworth and China Oceanwide pulled their joint voluntary notice with the Committee on Foreign Investment in the United States and have yet to refile it. China Oceanwide agreed to pay $2.7 billion in October 2016 for Genworth, whose mortgage insurance business is profitable but has been dragged down by problems in its life insurance lines.
The reason was to develop an additional mitigation approach to further protect the personal information of Genworth's policy holders.
"In the interim, we have been working with a leading U.S. third-party data administrator to implement a mitigation approach that further protects our U.S. customers' personal private data," said Tom McInerney, president and CEO of Genworth Financial, in a press release.
"We believe further protecting the personal information of our U.S. customers makes our overall mitigation plan more robust than our previous CFIUS filings and expect to file our new mitigation plan in the near term, as soon as the key terms of the additional mitigation approach are finalized."
The merger agreement's expiration date has been extended to April 1. Genworth has previously said if the deal is not completed prior to May, when it has a debt maturity, it is considering a partial sale of its private mortgage insurance subsidiary.
"We remain committed to our transaction with Genworth and look forward to building Genworth's businesses in the U.S. while at the same time bringing Genworth's expertise in long-term care and mortgage insurance to China," said Lu Zhiqiang, chairman of Oceanwide.