RICHMOND, Va., July 1, 2019 /PRNewswire/ -- Genworth
Financial, Inc. (NYSE: GNW) and China Oceanwide Holdings Group Co.,
Ltd. (Oceanwide) today announced they have agreed to an
11th waiver and agreement of each party's right to
terminate the previously announced merger agreement beyond the
current deadline of June 30,
2019.
In conjunction with the extension, Genworth has received
Oceanwide's consent to solicit interest in a potential disposition
of its interest in Genworth MI Canada Inc. (MI Canada). The parties decided to consider
strategic alternatives for MI Canada as a result of the absence of any
substantive progress in discussions on the transaction with
Canadian regulators. The parties have repeatedly inquired of
the Canadian authorities regarding the status of their review, but
to date have not received any substantive guidance or likely
timeframe for the completion of their review. Consequently,
the parties have concluded that exploring a potential disposition
of MI Canada is in the best
interests of the parties.
The 11th waiver and agreement extends the merger
agreement deadline to not later than November 30, 2019, which Oceanwide and Genworth
believe should allow sufficient time for the parties to explore
disposition options for MI Canada.
If Genworth identifies a suitable transaction for MI Canada, Oceanwide will have the right to
accept or reject the terms of the MI Canada transaction. If Oceanwide accepts
the terms, the parties will seek to close the sale of MI
Canada as promptly as possible,
and the acquisition of Genworth Financial concurrently or promptly
thereafter. However, in the event Oceanwide rejects the MI
Canada sale transaction, the
parties will each have the right to terminate the Oceanwide
acquisition of Genworth Financial at that time.
"MI Canada is one of our
top-performing businesses. However, the lack of transparent
feedback or guidance from Canadian regulators about their review
left us no choice but to look at strategic alternatives for MI
Canada that would eliminate the
need for Canadian regulatory approval of the Oceanwide
transaction," said Tom McInerney,
president and CEO of Genworth.
"Another potential benefit of selling all or a portion of MI
Canada would be the opportunity to
use the proceeds to satisfy future debt maturities," McInerney
noted.
"The transaction with Oceanwide has taken longer than any of us
anticipated and we owe it to our stockholders to close it as soon
as possible. However, an additional extension may be required to
complete the potential disposition of MI Canada," McInerney said. "In the meantime, we
are in discussions with other regulators about the disposition of
MI Canada and its impact on the
overall Oceanwide transaction."
The Oceanwide transaction will still require clearance in
China for currency
conversion. Updates will be provided as part of Genworth's
second quarter earnings report, or sooner, depending on
developments.
LU Zhiqiang, chairman of Oceanwide, added: "Oceanwide remains
committed to the transaction at the original purchase price of
$5.43 per share. We also remain
committed to the $1.5 billion
contribution to Genworth, following the consummation of the
transaction. We look forward to closing the transaction as
soon as possible so that we can bring certainty to Genworth
stockholders and begin to realize the benefits of our merger."
About Genworth Financial
Genworth Financial, Inc. (NYSE: GNW) 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.
From time to time, Genworth releases important information via
postings on its corporate website. Accordingly, investors and other
interested parties are encouraged to enroll to receive automatic
email alerts and Really Simple Syndication (RSS) feeds regarding
new postings. Enrollment information is found under the "Investors"
section of genworth.com. From time to time, Genworth's
publicly traded subsidiaries, Genworth MI Canada Inc. and Genworth
Mortgage Insurance Australia Limited, separately release financial
and other information about their operations. This information can
be found at http://genworth.ca and
http://www.genworth.com.au.
About Oceanwide
Oceanwide is a privately held, family owned international
financial holding group founded by LU Zhiqiang. Headquartered in
Beijing, China, Oceanwide's
well-established and diversified businesses include operations in
financial services, energy, technology information services,
culture and media, and real estate assets globally, including in
the United States.
Oceanwide is the controlling shareholder of the Shenzhen-listed Oceanwide Holdings Co., Ltd.
and Minsheng Holdings Co. Ltd.; the Hong
Kong-listed China Oceanwide Holdings Limited and China
Tonghai International Financial Limited (formerly known as Quam
Limited); the privately-held International Data Group, Minsheng
Securities, Minsheng Trust, and Asia Pacific Property &
Casualty Insurance; and it is the single largest shareholder of
Australia-listed CuDECO Ltd. China
Oceanwide also is a minority investor in Shanghai-listed China
Minsheng Bank and Hong
Kong-listed Legend Holdings. In the United States, Oceanwide has real estate
investments in New York,
California, and Hawaii. Businesses controlled by Oceanwide
have more than 10,000 employees globally.
Cautionary Note Regarding Forward-Looking Statements
This communication includes certain statements that may
constitute "forward-looking statements" within the meaning of the
federal securities laws, including Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Forward-looking
statements may be identified by words such as "expects," "intends,"
"anticipates," "plans," "believes," "seeks," "estimates," "will" or
words of similar meaning and include, but are not limited to,
statements regarding the closing of the transaction with Oceanwide,
the receipt of required approvals relating thereto and the any
capital contribution resulting therefrom, as well as statements
regarding the potential disposition of Genworth MI Canada Inc. ("MI
Canada"). Forward-looking
statements are based on management's current expectations and
assumptions, which are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict. Actual
outcomes and results may differ materially from those in the
forward-looking statements and factors that may cause such a
difference include, but are not limited to, risks and uncertainties
related to: (i) the risk that the transaction with Oceanwide
may not be completed in a timely manner or at all, which may
adversely affect Genworth's business and the price of Genworth's
common stock; (ii) the parties' inability to obtain regulatory
approvals or clearances, or the possibility that regulatory
approvals may further delay the transaction or will not be received
prior to November 30, 2019 (and either or both of the parties
may not be willing to further waive their End Date termination
rights beyond November 30, 2019) or that materially burdensome
or adverse regulatory conditions may be imposed in connection with
any such regulatory approvals or clearances (including those
conditions that either or both of the parties may be unwilling to
accept) or that with continuing delays, circumstances may arise
that make one or both parties unwilling to proceed with the
transaction with Oceanwide or unable to comply with the conditions
to existing regulatory approvals; (iii) the risk that the
parties will not be able to obtain the required regulatory
approvals, including in connection with a potential alternative
funding structure or the current geopolitical environment, or that
one or more regulators may rescind or fail to extend existing
approvals, or that the revocation by one regulator of approvals
will lead to the revocation of approvals by other regulators;
(iv) the parties' inability to obtain any necessary regulatory
approvals or extensions for the post-closing capital plan, and/or
the risk that a condition to closing of the transaction with
Oceanwide may not be satisfied or that a condition to closing that
is currently satisfied may not remain satisfied due to the delay in
closing the transaction; (v) risks relating to any potential
disposition of MI Canada that are similar to the foregoing,
including regulatory, legal or contractual restrictions that may
impede Genworth's ability to consummate a disposition of MI
Canada, as well as potential
changes in market conditions generally or conditions relating to MI
Canada's industry or business that
may impede any such sale, (vi) potential legal
proceedings that may be instituted against Genworth related to the
transactions with Oceanwide or the potential sale disposition of MI
Canada; (vii) the risk that
the proposed transactions disrupts Genworth's current plans and
operations as a result of the announcement and consummation of the
transactions; (viii) potential adverse reactions or changes to
Genworth's business relationships with clients, employees,
suppliers or other parties or other business uncertainties
resulting from the announcement of the transactions or during the
pendency of the transactions, including but not limited to such
changes that could affect Genworth's financial performance;
(ix) certain restrictions during the pendency of the
transactions that may impact Genworth's ability to pursue certain
business opportunities or strategic transactions;
(x) continued availability of capital and financing to
Genworth before the consummation of the transactions;
(xi) further rating agency actions and downgrades in
Genworth's financial strength ratings; (xii) changes in
applicable laws or regulations; (xiii) Genworth's ability to
recognize the anticipated benefits of the transactions;
(xiv) the amount of the costs, fees, expenses and other
charges related to the transactions; (xv) the risks related to
diverting management's attention from Genworth's ongoing business
operations; (xvi) the impact of changes in interest rates and
political instability; and (xvii) other risks and
uncertainties described in the Definitive Proxy Statement, filed
with the SEC on January 25, 2017, and Genworth's Annual Report
on Form 10-K, filed with the SEC on February 27,
2019. Unlisted factors may present significant additional obstacles
to the realization of forward-looking statements. Consequences of
material differences in results as compared with those anticipated
in the forward-looking statements could include, among other
things, business disruption, operational problems, financial loss,
legal liability to third parties and similar risks, any of which
could have a material adverse effect on Genworth's consolidated
financial condition, results of operations, credit rating or
liquidity. Accordingly, we caution you against relying on any
forward-looking statements. Further, forward-looking statements
should not be relied upon as representing Genworth's views as of
any subsequent date, and Genworth does not undertake any obligation
to update forward-looking statements to reflect events or
circumstances after the date they were made, whether as a result of
new information, future events or otherwise, except as may be
required under applicable securities laws.
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SOURCE Genworth Financial, Inc.