Genworth and Oceanwide Saga Continues

On August 14, Genworth Financial, and China Oceanwide Holdings Group announced they have agreed to a sixth waiver and agreement of each party’s right to terminate the previously announced merger agreement.  The sixth waiver and agreement extends the previous deadline of August 15, 2018 to December 1, 2018 to allow additional time to complete the regulatory review process.


The sixth waiver and agreement also waives the unstacking of Genworth Life and Annuity Insurance Company (GLAIC) from Genworth Life Insurance Company (GLIC), regulatory approval of which had been a condition of Oceanwide’s obligation to close the merger, as well as each party’s respective covenants with respect to the unstacking, including Oceanwide’s obligation to contribute $525 million to facilitate the unstacking. The waiver also waives Oceanwide’s obligation to contribute $600 million to Genworth for the repayment of the company’s debt obligations due May 2018, which, as previously disclosed, has been retired with the proceeds from a term loan and cash on hand.


Separately, Oceanwide has agreed to a capital investment plan under which Oceanwide and/or its affiliates will contribute an aggregate of $1.5 billion to Genworth over time following consummation of the merger, with the final amounts of the plan to be contributed by March 31, 2020.  Such contribution will be subject to the closing of the merger and the receipt of required regulatory approvals.  The contribution would be used to further improve Genworth’s financial stability, which may include retiring Genworth’s debt due in 2020 and 2021 or enabling future growth opportunities.


The closing of the proposed transaction remains subject to the receipt of required regulatory approvals in the U.S., China and other international jurisdictions and other closing conditions. As previously announced, the Committee on Foreign Investment in the United State (CFIUS) completed its review of the proposed transaction and concluded that there are no unresolved national security concerns.


“Oceanwide and Genworth are working hard to close the transaction as quickly as possible. Genworth continues to believe that the transaction is the best path forward for our stockholders and other stakeholders.” – Genworth President and CEO, Tom McInerney.


Added LU Zhiqiang, chairman of Oceanwide: “I am pleased with our progress to date and look forward to closing the transaction, which will bring financial stability to Genworth’s businesses in the U.S. and allow us to export Genworth’s insurance expertise and insurance solutions to China.”