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China firm to buy US insurance giant Genworth for $2.7 bn

SHANGHAI (AFP) – 

A Chinese conglomerate has agreed to buy New York-listed US insurance firm Genworth Financials for $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 Sunday.

There have 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 four million life insurance customers and also offers mortgage insurance products, according to its website.

The offer represents a 4.22 percent premium on its Friday closing price.

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

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

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.

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.

Upon completion of the deal, Genworth will become a standalone subsidiary of Oceanwide and will retain its current management team.

Investors cheered the news in Monday afternoon trading, with Oceanwide Holdings rising more than two percent on the Shenzhen market. It was flat in Hong Kong trade.

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

© 2016 AFP

Article source: http://www.france24.com/en/20161024-china-firm-buy-us-insurance-giant-genworth-27-bn