RICHMOND, Va., April 6, 2021 /PRNewswire/ -- Genworth Financial,
Inc. (NYSE: GNW) (Genworth, the Company) today 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.
(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
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new postings. Enrollment information is found under the "Investors"
section of genworth.com.
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 transactions Genworth is pursuing to address its
near-term liabilities and financial obligations, which may include
additional debt financing and/or transactions to sell a percentage
of its ownership interests in its U.S. mortgage insurance business,
and a future partnership with Oceanwide to offer insurance products
in China. 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 Genworth's determination to terminate
the merger agreement may adversely affect Genworth's business, the
price of Genworth's common stock, and Genworth's ability to pursue
these alternative transactions, and the risk that Genworth will be
unable to address its near-term liabilities and financial
obligations, including the risks that it will be unable to raise
additional debt financing and/or sell a percentage of its ownership
interest in its U.S. mortgage insurance business to repay the
promissory note to AXA S.A. or refinance its future debt
maturities; (ii) potential legal proceedings that may be instituted
against Genworth related to the termination of the transaction with
Oceanwide; (iii) potential adverse reactions or changes to
Genworth's business relationships with clients, employees,
suppliers or other parties or other business uncertainties
resulting from the termination of the transaction with Oceanwide,
including but not limited to such changes that could affect
Genworth's financial performance; (iv) continued availability of
capital and financing to Genworth; (v) further rating agency
actions and downgrades in Genworth's financial strength ratings;
(vi) changes in applicable laws or regulations; (vii) the impact of
changes in interest rates and political instability; (viii) the
possibility that Genworth may not pursue potential future
opportunities with Oceanwide to offer insurance products in
China; and (ix) other risks and
uncertainties described in Genworth's Annual Report on Form 10-K,
filed with the SEC on February 26,
2021. 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.