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August 13, 2019 at 01:01 PM
A big asset manager has agreed to pay about $1.8 billion for Genworth Financial Inc.’s 56.9% stake in the Genworth MI Canada Inc. mortgage insurance business, Genworth announced today.
The would-be buyer, Brookfield Business Partners L.P., hopes to close on the deal by Dec. 31, Genworth said.
(Related: Genworth Noteholders Shrug Off Consent Pay Offer)
If Brookfield and Genworth fail to get the regulatory approvals they need to complete the deal by Oct. 31, then Brookfield will provide $850 million in “bridge financing,” or temporary financing, Genworth said.
The deal is subject to approval by Canada’s minister of finance.
Brookfield Business Partners said in its deal announcement that it’s not currently making an offer for the Genworth MI Canada shares owned by parties other than Genworth.
“Brookfield Business Partners may in the future consider the appropriateness of such an offer after discussion with Genworth Canada’s shareholders and other stakeholders,” Brookfield Business Partners said.
The Other Deal
The managers of Genworth have been trying to sell Genworth to China Oceanwide Holdings Group Co. Ltd. of Beijing since 2016. For Genworth, one obstacle to completing the China Oceanwide deal has been getting permission from regulators in Canada to sell Genworth MI Canada to China Oceanwide.
Selling Genworth MI Canada could help Genworth move ahead with the China Oceanwide deal, Genworth said.
Even if the China Oceanwide deal falls through, cash from the Brookfield deal could increase Genworth’s overall financial flexibility, Genworth said.
The Players
Genworth was once a large player in the U.S. life and annuity markets, and it continues to sell some long-term care insurance (LTCI). It continues to have large blocks of life, annuity and LTCI business.
The company is still a major mortgage insurance issuer in the United States, Australia and Canada. Genworth says it’s the largest commercial residential mortgage insurance provider in Canada.
