Genworth's acquisition by China Oceanwide on hold again
Genworth Financial Inc. for the second time has withdrawn and refiled its application with the federal government to approve its acquisition by China Oceanwide Holdings Group Ltd.
By withdrawing the joint voluntary notice with the Committee on Foreign Investment in the United States, the timeline for approving the transaction will restart.
There will be a new 30-day review period, which may be followed by an additional 45-day investigation period.
Besides the CFIUS, the deal needs to be approved by insurance regulators in the U.S., China and other international jurisdictions, a press release said.
Genworth Financial's private mortgage insurance subsidiary is the fourth largest by insurance-in-force but slipped to fifth in terms of new insurance in the first quarter. The U.S. mortgage insurance business had operating earnings of $73 million in the first quarter, compared with $61 million in the first quarter of 2016. Genworth Financial also owns stakes in publicly traded mortgage insurers in Canada and Australia.
But the parent company's results have been affected by losses associated with its life and long-term care lines of business. Last August, it considered isolating the U.S. mortgage insurance business from the rest of the company.
In October, China Oceanwide agreed to pay $2.7 billion for Genworth. Before the CFIUS application was withdrawn the first time, Genworth scheduled a special meeting for March 7 to for stockholders to vote on the deal.
"The Genworth board is fully committed to closing the transaction because it is the best option for our shareholders," said Genworth Financial President and CEO Tom McInerney in the press release. "This transaction also achieves the best outcome for the policyholders of our insurance companies and other important stakeholders."