Chinese firm to buy US insurance giant
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. –