China Oceanwide to buy Genworth Financial for $US2.7 billion
A Chinese company founded by billionaire Lu Zhiqiang stands to become the majority shareholder in Australia’s largest mortgage insurer after making a $US2.7 billion ($3.6 billion) bid for its US parent.
China Oceanwide has agreed to buy all the shares in New York-listed Genworth Financial, which is the 52 per cent shareholder of Genworth Mortgage Insurance Australia (GMIA).
Mr Lu, the chairman and founder of China Oceanwide, is worth $US5.2 billion and is the 29th richest person in China, according to Forbes.
China Oceanwide would pick up the 52 per cent shareholding in the Australian business under the deal, which will require regulatory approvals.
The companies said China Oceanwide intended to keep Genworth’s portfolio of businesses, including the Australian mortgage insurance arm, which was floated on the ASX early last year.
Genworth Financial has had difficulties in its life insurance business, and the proposed takeover would help shore up the group by injecting $US1.1 billion of additional capital.
The takeover, a $US5.43-a-share all-cash offer, was structured to increase the likelihood of obtaining regulatory approvals, the companies said.
China Oceanwide is a privately held, family owned financial holding group, with interests in financial services, energy, culture, media and real estate.
Mr Lu said in a statement: “Genworth is an established leader in both mortgage insurance and long-term care insurance, which are markets that present significant long-term growth opportunities.”
“We are impressed by Genworth’s purpose and its focus on helping people manage the financial challenges of ageing as well as achieving the dream of home ownership.”
Genworth Financial’s board has backed the deal, which will also require approval from shareholders.
selling more pieces of the farm..this is australias largest insurer..not a small acquisition in relation to australia..
“China Oceanwide is a privately held, family owned financial holding group, with interests in financial services, energy, culture, media and real estate.”