RICHMOND, Va., July 22, 2015 /PRNewswire/ -- Genworth
Financial, Inc. (NYSE: GNW) announces it has entered into exclusive
negotiations with AXA S.A. after receiving an irrevocable offer to
purchase its lifestyle protection insurance business. The company
expects to accept the offer and execute an associated purchase
agreement upon completion of the French works council1
consultation process. The sale price is expected to be
approximately $510
million2 and the company will record an after-tax
loss of approximately $310
million2 in the second quarter of 2015 related to
the expected sale and pension settlement costs. Net proceeds from
the transaction, net of pension settlement costs and transaction
related expenses, are estimated to be approximately $400 million2. Genworth plans to use
these proceeds to advance compliance with the Private Mortgage
Insurer Eligibility Requirements and to reduce debt levels. The
sale is expected to close by the end of 2015 and is subject to
other customary conditions, including requisite regulatory
approvals.
"This transaction is another important step toward simplifying
our business portfolio and increasing the financial flexibility and
strength of Genworth," said Tom
McInerney, President and CEO. "This sale also provides the
opportunity for our employees in the business and the purchaser to
have a strong business to grow going forward."
Since October 2012, the company
has identified its lifestyle protection insurance business as
non-core and communicated its interest to sell it as economic and
business conditions permitted.
Barclays and Sidley Austin LLP are advising Genworth on this
transaction.
About Genworth Financial
Genworth Financial, Inc. (NYSE: GNW) is a leading Fortune 500
insurance holding company committed to helping families become more
financially secure, self-reliant and prepared for the future.
Genworth has leadership positions in mortgage insurance and long
term care insurance and product offerings in life insurance and
fixed annuities that assist consumers in solving their home
ownership, insurance and retirement needs. To help families start
"the talk" about their futures and long term care planning,
Genworth recently completed the first stage of its national #Lets
Talk Tour to encourage conversations and information sharing.
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.
Cautionary Note Regarding Forward-Looking Statements
This press release contains certain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. 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
transaction to dispose of the Company's lifestyle protection
insurance business and its anticipated financial impact. The sale
of the company's lifestyle protection insurance business remains
subject to certain closing conditions, including regulatory
approvals, and the company cannot predict with certainty whether or
when this transaction will close or the impact that foreign
exchange fluctuations or any purchase price adjustments will have
on anticipated proceeds. 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 due to global political, economic,
business, competitive, market, regulatory and other factors and
risks, including the items identified under "Part I—Item 1A—Risk
Factors" of our Annual Report on Form 10-K for the year ended
December 31, 2014, filed with the Securities and Exchange
Commission (SEC) on March 2, 2015 and
as updated in Genworth's Form 10-Q filed with the SEC on
April 29, 2015.
We undertake no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future developments or otherwise.
1 In France,
employees are represented by a works council which is directly
elected by employees. Under French law, there is a statutory
obligation to inform and consult with the works council prior to
Genworth entering into the purchase agreement for its lifestyle
protection insurance business. The works council is responsible for
consulting with French management on a range of issues affecting
these employees.
2 Sale price of €475 million and assumed foreign
exchange rate of 1.1142 (€ to US$) as of June 30, 2015, less an adjustment
for changes in stockholders' equity and other items since
December 31, 2014 and is subject to
change between now and closing.
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SOURCE Genworth Financial, Inc.