While China Oceanwide came to terms on obtaining the funding it needed to acquire Genworth Financial, the lack of a final agreement postponed the transaction for the 16th time.
There were high hopes that the deal would
"As we extend the waiver and agreement again, it is important to remember that it wasn't until the end of March 2020 that we received substantially all the regulatory approvals needed to close the transaction," Tom McInerney, Genworth's president and CEO, said in a press release. "That put Oceanwide in the difficult position of completing the funding process in the middle of a global pandemic."
China Oceanwide has reached an agreement with Hony Capital on the key commercial terms and conditions of the $1.8 billion financing plan to complete the acquisition, much of which is to come from
But China Oceanwide is blaming the logistical challenges from the pandemic for the new delay, stating that travel restrictions and mandatory quarantine requirements significantly lengthened the time required to hold in-person discussions with Hony to finalize the terms and conditions.
Negotiations will resume following a national holiday in China that runs from Oct. 1 through 8.
It was almost four years ago, on Oct. 23, 2016, that Genworth — needing more capital because of a struggling long-term care insurance business — agreed to the transaction. A couple of months prior to the deal being announced, it had contemplated
If the China Oceanwide deal, which now has a Nov. 30 deadline, fails to close, that IPO is
There will be an interim checkpoint on Oct. 31. At that time, China Oceanwide needs to provide Genworth with satisfactory evidence that the necessary funding will be available to close the transaction on schedule. If that does not happen, Genworth will have the right to terminate the merger agreement on or after Oct. 31.
Following the latest postponement, announced before trading began on Oct. 1, Genworth's stock opened $0.40 per share lower than its previous close at $2.95.
