Genworth Financial, Inc. announced that it has exercised its right to terminate its merger agreement with China Oceanwide Holdings Group Co., Ltd. (Oceanwide) as of April 6, 2021. Terminating the agreement allows Genworth to pursue its revised strategic plan without restrictions and without uncertainty regarding its ultimate ownership, which might impact the Company’s ability to successfully execute the plan.
The Company’s revised strategic plan includes a potential partial initial public offering (IPO) of its U.S. MI business (subject to market conditions as well as the satisfaction of various conditions and approvals). China Oceanwide and Genworth also will continue to explore potential opportunities to bring long-term care insurance and other similar products to the Chinese insurance market in the future.
“Genworth’s Board of Directors has concluded that Oceanwide will be unable to close the proposed transaction within a reasonable time frame and that greater clarity about Genworth’s future is needed now in order for the Company to execute its plans to maximize shareholder value. Thus, the Board decided to terminate the Oceanwide merger agreement,” said James Riepe, non-executive chairman of the Genworth Board of Directors. “Although disappointed after more than four years of efforts, I want to especially thank our shareholders, regulators, policyholders, customers and employees, for their patience and support as we all persevered through an especially long and arduous cross-border approval process.”
“We are grateful for Oceanwide’s commitment to our planned transaction over the years,” said Tom McInerney, Genworth President and CEO. “During that time, we together navigated significant market uncertainty and regulatory hurdles, a testament to both parties’ good faith efforts to complete the transaction. I would like to thank Chairman Lu for his commitment and partnership throughout this process.”
McInerney continued, “While we believe it is necessary and appropriate at this stage to terminate the transaction, Genworth continues to share Chairman Lu’s vision of bringing long-term care solutions to the aging population in China. Both parties believe there are significant, compelling opportunities to address critical societal needs outside of the U.S.”
Genworth has already executed important steps under its revised strategic plan, including the sale of Genworth’s interest in its Australian mortgage insurance business and actions to align its expense structure with current business activities. These steps expand on actions the Company has taken over the last several years to strengthen its financial position, including the sale of its Canadian mortgage insurance business, the completion of a $750 million debt offering at the U.S. MI holding company and the negotiation of a settlement with AXA S.A.
About Genworth Financial
Genworth Financial, Inc. is a Fortune 500 insurance holding company committed to helping families achieve the dream of homeownership and address the financial challenges of aging through its leadership positions in mortgage insurance and long term care insurance. Headquartered in Richmond, Virginia, Genworth traces its roots back to 1871 and became a public company in 2004. For more information, visit genworth.com.
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