Chi­nese firm to buy US in­sur­ance gi­ant

The Myanmar Times - - International Business -

A CHI­NESE con­glom­er­ate has agreed to buy US in­sur­ance firm Gen­worth Fi­nan­cials for US$2.7 bil­lion, the lat­est in a Chi­nese buy­ing spree of for­eign as­sets.

China Ocean­wide Hold­ings, the founder and key share­holder of China Min­sheng Bank, of­fered $5.43 per share for all out­stand­ing shares of Gen­worth in an all-cash trans­ac­tion, ac­cord­ing to a joint state­ment.

There has been a flurry of over­seas ac­qui­si­tions this year by Chi­nese firms seek­ing bet­ter re­turns and in­dus­trial know-how, with tar­gets rang­ing from Hol­ly­wood stu­dio Le­gendary to lead­ing Ger­man ro­bot­ics firm Kuka and Swiss seed gi­ant Syn­genta. Gen­worth, founded in 1871, has nearly 4 mil­lion life in­sur­ance cus­tomers and also of­fers mort­gage in­sur­ance prod­ucts, ac­cord­ing to its web­site.

“Gen­worth is an es­tab­lished leader in both mort­gage in­sur­ance and long-term care in­sur­ance,” Ocean­wide chair Lu Zhiqiang said in the state­ment.

“We are pro­vid­ing cru­cial fi­nan­cial sup­port to Gen­worth’s ef­forts to re­struc­ture its US life in­sur­ance busi­ness and as­sets.”

The Bei­jing-based firm also promised to of­fer an ad­di­tional $600 mil­lion to Gen­worth to ad­dress its debt that will ma­ture in 2018 and a $525 mil­lion cash in­jec­tion into its life in­sur­ance busi­ness.

Tom Mclner­ney, pres­i­dent and chief ex­ec­u­tive of­fi­cer of the Vir­ginia-based in­surer, called the Chi­nese firm “an ideal owner” and said the in­vest­ment was in the best in­ter­ests of Gen­worth’s stock­hold­ers.

Ocean­wide con­trols sev­eral fi­nan­cial com­pa­nies in­clud­ing Shen­zhen-listed Min­sheng Hold­ings.

It has also in­vested in sev­eral mega-prop­er­ties on the US west coast, in­clud­ing a tower that will soon be San Fran­cisco’s sec­ond-tallest and a bil­lion-dol­lar con­do­minium and ho­tel devel­op­ment in Los An­ge­les, ac­cord­ing to its web­site.

Mr Lu is China’s ninth-rich­est man with a net worth of 85 bil­lion yuan ($12.5 bil­lion), ac­cord­ing to the lat­est rank­ing of lux­ury mag­a­zine pub­lisher Hu­run Re­port.

The deal, which is still sub­ject to share­holder ap­proval among other clos­ing con­di­tions, is ex­pected to be closed by mid-2017. –

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