Genworth Financial Inc. and China Oceanwide Holdings Group Co. Ltd. have agreed to yet another waiver in their previously announced merger agreement that extends the deadline beyond June 30, 2019.
According to Genworth, the delay is necessary to allow time to consider options for disposition of its interest in Genworth MI Canada Inc. The 11th waiver and agreement extends the merger deadline to Nov. 30, 2019. If a suitable transaction materializes during that time, Oceanwide will have the right to accept or reject it; if rejected, each party will have the right to terminate Oceanwide’s acquisition of Genworth.
Genworth attributes the necessity for the delay and the MI Canada disposition to a lack of progress in discussions with Canadian regulators over the merger transaction, and says that repeated inquiries by both parties to the merger have not brought a response from regulators as to review status. This turn has led Genworth and Oceanwide to explore the possibilities for disposition of MI Canada.
“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,” Tom McInerney, president and CEO of Genworth, says in a statement.
He adds, “In the meantime, we are in discussions with other regulators about the disposition of MI Canada and its impact on the overall Oceanwide transaction.”
Clearance from China on currency conversion is still required for the Oceanwide transaction to proceed.
In a statement, Lu Zhiqiang, chairman of Oceanwide, says, “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.”