Anbang to Seek Extension for Buy of U.S. Life Insurer
October 28 2016 - 1:50PM
Dow Jones News
Beijing-based Anbang Insurance Group Co. plans to extend again
the deadline for obtaining regulatory approvals for its $1.57
billion deal to buy U.S. life insurer Fidelity & Guaranty Life,
according to people familiar with the matter.
The Chinese insurer isn't on track to complete
insurance-department regulatory approvals in Iowa and New York by a
Nov. 7 deadline, according to the top insurance regulator in Iowa,
which is leading the review process, and other people.
"It is not possible" to have a ruling on the deal by early
November because Anbang's application is "still in review process,"
and Iowa must provide 20 days' notice for a public hearing once the
state deems the file complete, said Iowa Insurance Commissioner
Nick Gerhart. Fidelity & Guaranty is based in Des Moines.
A person familiar with the companies' thinking said they have
agreed to an extension, but details such as the new deadline are
still being worked out.
The deal was announced in November 2015. Fidelity & Guaranty
stock traded around the deal price of $26.80 a share until late May
but stood at about $22 in trading Friday.
Anbang's proposed acquisition of the insurer marked one of the
first Chinese insurance-industry deals as the conglomerate and
other Chinese firms are rapidly deploying money in the U.S. Chinese
companies have made a record $199 billion in overseas acquisitions
this year. Anbang Insurance has been one of China's most aggressive
investors abroad with its holdings including New York's Waldorf
Astoria.
Earlier this week, another Chinese firm, China Oceanwide
Holdings Group Co., announced a $2.7 billion acquisition of
Richmond, Va.-based Genworth Financial Inc., with an additional
$1.1 billion cash injection. Numerous Wall Street analysts have
cited Anbang's inability to win regulatory approvals so far as
boding poorly for the Genworth pact.
But Anbang's situation is unique, according to people familiar
with the matter. The approval process hit snags this spring when
the insurer failed to provide detailed information being sought by
New York's Department of Financial Services, the department said at
the time.
The details sought pertained to Anbang's ownership structure,
relationships among its shareholders, and the source of its funding
for the deal, people familiar with the matter said.
At that point, Anbang withdrew its New York application and said
it would refile later. But it hasn't done so, people familiar with
the matter said.
"We have the situation where they withdrew in New York," Mr.
Gerhart said. "Anbang needs both states to approve it."
Fidelity & Guaranty said in regulatory filings earlier this
year that the parties had obtained approvals from the Committee on
Foreign Investment in the U.S. and the Vermont Department of
Financial Regulation.
Rick Carew contributed to this article.
Write to Leslie Scism at leslie.scism@wsj.com
(END) Dow Jones Newswires
October 28, 2016 13:35 ET (17:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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