RICHMOND, Va. and
BEIJING, Oct. 23, 2016 /PRNewswire/ -- China Oceanwide
Holdings Group Co., Ltd. ("China Oceanwide") and Genworth
Financial, Inc. (NYSE: GNW) ("Genworth") today announced that they
have entered into a definitive agreement under which China
Oceanwide has agreed to acquire all of the outstanding shares of
Genworth for a total transaction value of approximately
$2.7 billion, or $5.43 per share in cash. The acquisition will be
completed through Asia Pacific Global Capital Co. Ltd., one of
China Oceanwide's investment platforms. The transaction is subject
to approval by Genworth's stockholders as well as other closing
conditions, including the receipt of required regulatory
approvals.
As part of the transaction, China Oceanwide has additionally
committed to contribute to Genworth $600
million of cash to address the debt maturing in 2018, on or
before its maturity, as well as $525
million of cash to the U.S. life insurance businesses. This
contribution is in addition to $175
million of cash previously committed by Genworth Holdings,
Inc. to the U.S. life insurance businesses. Separately, Genworth
also announced today preliminary charges unrelated to this
transaction of $535 to $625 million
after-tax associated with long term care insurance (LTC) claim
reserves and taxes. Those items are detailed in a separate press
release. The China Oceanwide transaction is expected to mitigate
the negative impact of these charges on Genworth's financial
flexibility and facilitate its ability to complete its previously
announced U.S. life insurance restructuring plan. Genworth believes
this transaction is the best strategic alternative to maximize
stockholder value.
James Riepe, non-executive
chairman of the Genworth Board of Directors said, "The China
Oceanwide transaction is the result of an active and extensive
review process conducted over the past two years under the
supervision of the Board and with guidance from external financial
and legal advisors. The Board is confident that the sale of the
company to China Oceanwide is the best path forward for Genworth's
stockholders."
Upon the completion of the transaction, Genworth will be a
standalone subsidiary of China Oceanwide and Genworth's senior
management team will continue to lead the business from its current
headquarters in Richmond,
Virginia. Genworth intends to maintain its existing
portfolio of businesses, including its MI businesses in
Australia and Canada. Genworth's day-to-day operations are
not expected to change as a result of this transaction.
China Oceanwide is a privately held, family owned international
financial holding group founded by Mr. Lu
Zhiqiang. Headquartered in Beijing, China, China Oceanwide's
well-established and diversified businesses include operations in
financial services, energy, culture and media, and real estate
assets globally, including in the United
States. Businesses controlled by China Oceanwide have more
than 10,000 employees globally.
"Genworth is an established leader in both mortgage insurance
and long term care insurance, which are markets that present
significant long-term growth opportunities," added Mr. Lu, Chairman
of China Oceanwide. "We are impressed by Genworth's purpose and its
focus on helping people manage the financial challenges of aging as
well as achieving the dream of homeownership. In acquiring Genworth
and contributing $1.1 billion of
additional capital, we are providing crucial financial support to
Genworth's efforts to restructure its U.S. life insurance
businesses by unstacking Genworth Life and Annuity Insurance
Company (GLAIC) from under Genworth Life Insurance Company (GLIC)
and address its 2018 debt maturity. In order to close the
transaction and achieve these objectives, we have structured the
transaction with the intention of increasing the likelihood of
obtaining regulatory approval."
Tom McInerney, President &
Chief Executive Officer of Genworth concluded, "We believe that
this transaction creates greater and more certain stockholder value
than our current business plan or other strategic alternatives, and
is in the best interests of Genworth's stockholders. China
Oceanwide is an ideal owner for Genworth going forward. They
recognize the strength of our mortgage insurance platform and the
importance of long term care insurance in addressing an aging
population. The capital commitment from China Oceanwide will
strengthen our business and increase the likelihood of obtaining
regulatory approval."
Genworth will continue to focus on its key financial priorities,
including strengthening the balance sheet and stabilizing and
improving ratings over time, particularly in its U.S. MI business.
Genworth will also continue to focus on its key operational
priorities, most notably executing its multi-year LTC rate action
plan, which is essential to stabilizing the financial position of
the legacy LTC business. China Oceanwide has no current intention
or future obligation to contribute additional capital to support
Genworth's legacy LTC business.
The transaction, which has been approved by both companies'
boards of directors, is expected to close by the middle of 2017,
subject to the requisite approval by Genworth's stockholders as
well as certain other closing conditions, including the receipt of
regulatory approvals. Both China Oceanwide and Genworth have
initiated discussions with regulators in key jurisdictions.
Goldman, Sachs & Co. and Lazard are acting as financial
advisors to Genworth. Willkie, Farr & Gallagher LLP and Weil,
Gotshal & Manges LLP are acting as legal advisors to Genworth,
and Richards, Layton & Finger is acting as legal advisor to the
Genworth Board of Directors. Citi and Willis Capital Markets &
Advisory are acting as financial advisors to China Oceanwide and
Sullivan & Cromwell and Potter Anderson & Corroon LLP are
acting as legal advisors to China Oceanwide.
Conference Call and Supplemental Information
Genworth will conduct a 30-minute conference call
on October 24, 2016 at 8 a.m. (ET) to discuss
the transaction. The conference call will be accessible via
telephone and the Internet. The dial-in number for the conference
call is 877 888.4034 or 913 489.5101 (outside the U.S.); conference
ID # 7989168. To participate in the call by webcast, register
at http://investor.genworth.com at least 15 minutes prior
to the webcast to download and install any necessary
software.
Replays of the call will be available through November 7,
2016 at 888 203.1112 or 719 457.0820 (outside the U.S.);
conference ID # 7989168. The webcast will also be archived on
Genworth's website.
Additional information regarding the transaction will be
available on Genworth's website, http://investor.genworth.com
in advance of the call. Investors are encouraged to review all of
these materials.
About China Oceanwide
China Oceanwide is a privately held, family owned international
financial holding group founded by Mr. Lu
Zhiqiang. Headquartered in Beijing, China, China Oceanwide's
well-established and diversified businesses include operations in
financial services, energy, culture and media, and real estate
assets globally, including in the United States.
China Oceanwide is the controlling shareholder of the
Shenzhen-listed Oceanwide Holdings
Co., Ltd. and Minsheng Holdings Co. Ltd.; the Hong Kong-listed China Oceanwide Holdings
Limited; the privately-held Minsheng Securities, Minsheng Trust,
and Asia-Pacific Property & Casualty Insurance; and it is the
single largest shareholder of Australia-listed CuDECO Ltd. China Oceanwide
also is a minority investor in Shanghai-listed China
Minsheng Bank and Hong
Kong-listed Legend Holdings. In the United States, China Oceanwide has real
estate investments in New York,
California, and Hawaii. Businesses controlled by China
Oceanwide have more than 10,000 employees globally.
About Genworth Financial
Genworth Financial, Inc. (NYSE: GNW) is a Fortune 500 insurance
holding company committed to helping families achieve the dream of
homeownership and address the financial challenges of aging through
its leadership positions in MI and LTC. Headquartered in
Richmond, Virginia, Genworth
traces its roots back to 1871 and became a public company in
2004. For more information, visit genworth.com.
From time to time, Genworth releases important information via
postings on its corporate website. Accordingly, investors and other
interested parties are encouraged to enroll to receive automatic
email alerts and Really Simple Syndication (RSS) feeds regarding
new postings. Enrollment information is found under the "Investors"
section of genworth.com. From time to time, Genworth's
publicly traded subsidiaries, Genworth MI Canada Inc. and Genworth
Mortgage Insurance Australia Limited, separately release financial
and other information about their operations. This information can
be found at http://genworth.ca and
http://www.genworth.com.au.
Important Information For Investors and Stockholders
In connection with the proposed transaction, Genworth Financial,
Inc. (Genworth) intends to file a proxy statement with the U.S.
Securities and Exchange Commission (SEC) in connection with the
solicitation of proxies for a special meeting to be called at a
future date. Promptly after filing its proxy statement in
definitive form with the SEC, Genworth will mail such definitive
proxy statement when available to each stockholder of Genworth
entitled to vote. Genworth stockholders are urged to read the
proxy statement (including all amendments and supplements thereto)
and all other relevant documents which Genworth will file with the
SEC when they become available, because they will contain important
information about the proposed transaction and related matters.
Stockholders will also be able to obtain copies of the proxy
statement, without charge, when available, at the SEC's website at
www.sec.gov or by contacting the investor relations department of
Genworth at the following:
David
Rosenbaum, 804 662.2643
david.rosenbaum@genworth.com
Participants in the Solicitation
Genworth and its directors and executive officers may be deemed
to be participants in the solicitation of proxies of Genworth's
stockholders in connection with the proposed transaction.
Genworth's stockholders may obtain, without charge, more detailed
information regarding such interested participants in Genworth's
Annual Report on Form 10-K filed with the SEC on February 26, 2016, its proxy statement filed with
the SEC on April 1, 2016, and any
Statements of Changes in Beneficial Ownership on Form 4 of such
participants, filed with the SEC. Additional information will be
available in the proxy statement when it becomes available.
Cautionary Note Regarding Forward-Looking Statements
This communication includes certain statements that may
constitute "forward-looking statements" within the meaning of the
federal securities laws, including Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. Forward-looking statements may be
identified by words such as "expects," "intends," "anticipates,"
"plans," "believes," "seeks," "estimates," "will" or words of
similar meaning and include, but are not limited to, statements
regarding the outlook for the company's future business and
financial performance. Forward-looking statements are based on
management's current expectations and assumptions, which are
subject to inherent uncertainties, risks and changes in
circumstances that are difficult to predict. Actual outcomes and
results may differ materially from those in the forward-looking
statements and factors that may cause such a difference include,
but are not limited to, risks and uncertainties related to: (i) the
risk that the transaction may not be completed in a timely manner
or at all, which may adversely affect Genworth's business and the
price of Genworth's common stock; (ii) the ability of the parties
to obtain stockholder and regulatory approvals, or the possibility
that they may delay the transaction or that materially burdensome
or adverse regulatory conditions may be imposed in connection with
any such regulatory approvals; (iii) the risk that a condition to
closing of the transaction may not be satisfied; (iv) potential
legal proceedings that may be instituted against Genworth following
announcement of the transaction; (v) the risk that the proposed
transaction disrupts Genworth's current plans and operations as a
result of the announcement and consummation of the transaction;
(vi) potential adverse reactions or changes to Genworth's business
relationships with clients, employees, suppliers or other parties
or other business uncertainties resulting from the announcement of
the transaction or during the pendency of the transaction,
including but not limited to such changes that could affect
Genworth's financial performance; (vii) certain restrictions during
the pendency of the transaction that may impact Genworth's ability
to pursue certain business opportunities or strategic transactions;
(viii) continued availability of capital and financing to Genworth
before the consummation of the transaction; (ix) further rating
agency actions and downgrades in Genworth's financial strength
ratings; (x) changes in applicable laws or regulations; (xi)
Genworth's ability to recognize the anticipated benefits of the
transaction; (xii) the amount of the costs, fees, expenses and
other charges related to the transaction; (xiii) the risks related
to diverting management's attention from the Company's ongoing
business operations; (xiv) the impact of changes in interest rates
and political instability; and (xv) other risks and uncertainties
described in Genworth's Annual Report on Form 10-K, filed with the
SEC on February 26, 2016. Unlisted
factors may present significant additional obstacles to the
realization of forward-looking statements. Consequences of material
differences in results as compared with those anticipated in the
forward-looking statements could include, among other things,
business disruption, operational problems, financial loss, legal
liability to third parties and similar risks, any of which could
have a material adverse effect on Genworth's consolidated financial
condition, results of operations, credit rating or liquidity.
Accordingly, forward-looking statements should not be relied upon
as representing Genworth's views as of any subsequent date, and
Genworth does not undertake any obligation to update
forward-looking statements to reflect events or circumstances after
the date they were made, whether as a result of new information,
future events or otherwise, except as may be required under
applicable securities laws.
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SOURCE Genworth Financial, Inc.