Genworth mulls action as merger delayed

TORONTO — Genworth Financial Inc. says it is mulling the sale of its Canadian arm as it criticized regulators for delaying the U.S. company’s pending takeover by China Oceanwide Holdings Group Co. Ltd.

The Virgina-based mortgage insurer says it has agreed with Oceanwide to “consider strategic alternatives” for Genworth MI Canada due to the “absence of any substantive progress” in discussions with Canadian regulators about the transaction announced in 2016.

Genworth chief executive Tom McInerney said Monday the lack of transparent feedback or guidance from Ottawa about the review “left us no choice” but to look at options that would eliminate the need for Canadian regulatory approval.

McInerney said on a recent conference call that Genworth’s discussion with Canadian regulators has centred around national security matters, including data protection.

The Office of the Superintendent of Financial Institutions, which regulates banks and insurance companies in Canada, said Tuesday it is continuing its review of Genworth’s application in consultation with the Department of Finance and Public Safety Canada.

Genworth and Oceanwide also agreed to extend their merger agreement to Nov. 30, 2019, from the previous deadline of June 30.

“An additional extension may be required to complete the potential disposition of MI Canada. In the meantime, we are in discussions with other regulators about the disposition of MI Canada and its impact on the overall Oceanwide transaction.”

Genworth MI Canada says it is the largest private residential mortgage insurer in the country.