Mortgage insurer Genworth Financial has said that its planned merger agreement with China Oceanwide Holdings Group Co., Ltd. may be further delayed due to operational disruptions caused by the coronavirus.
The New York State Department of Financial Services (NYDFS) recently reapproved the proposed acquisition of control by Oceanwide of Genworth’s New York-domiciled insurance company, Genworth Life Insurance Company of New York.
The original approval expired in March 2019.
In connection with the NYDFS’ reapproval, Genworth has agreed, among other things, to contribute $100 million to Genworth Life at the closing of the Oceanwide transaction.
Genworth and Oceanwide have communicated the terms of the agreement with the NYDFS to Genworth’s other domiciliary insurance regulators, and believe that these terms are acceptable to them as well.
However, given the ongoing challenges related to the coronavirus pandemic, including the remote work policies that have been put into effect for the parties and regulators involved, processes “have taken and may continue to take more time than would ordinarily be expected.”
Oceanwide still needs to receive clearance in China for the currency conversion and transfer of funds in order to complete the transaction.
As a result, Genworth and Oceanwide are discussing a short extension of the merger agreement beyond the current deadline of March 31, 2020.
The merger between Genworth and China Oceanwide had originally been set for June 30, 2019, but was pushed back to give Genworth time to explore the sale of its Canadian business, Genworth MI Canada Inc.