RICHMOND, Va., Oct. 22, 2019 /PRNewswire/ -- Genworth Financial, Inc. (GNW) (Genworth) today announced it received feedback from Canadian regulators with respect to the transaction (the "Proposed Transaction") pursuant to which Brookfield Business Partners L.P. (Brookfield Business Partners) has agreed to purchase Genworth's majority interest in Genworth MI Canada Inc. (Genworth Canada).
As previously disclosed, discussions with the Canadian regulators with respect to the acquisition of Genworth by China Oceanwide Holdings Group Co., Ltd. (Oceanwide) and its affiliates (the "Oceanwide Transaction") were focused on national security matters, including data protection and the safeguarding of our customers' information. The Canadian regulators continue to focus on those same matters in connection with their review of the pending sale of Genworth Canada to Brookfield Business Partners under the Insurance Companies Act (Canada). In particular, they are focused on the continued protection of Canadian customer data during the period after the closing of the Proposed Transaction when Genworth will be providing certain transition services to Genworth Canada before it transitions away from Genworth's information technology platforms.
Genworth and Brookfield Business Partners remain committed to the Proposed Transaction and are working to assure the Canadian regulators that Canadian customers' information has appropriate protections. Genworth and Brookfield Business Partners have received all other required approvals to complete the sale of Genworth Canada and continue to target a closing of the Proposed Transaction by the end of 2019.
As previously disclosed, Genworth is selling its stake in Genworth Canada to facilitate the completion of the Oceanwide Transaction. Genworth and Oceanwide previously extended the merger agreement deadline to not later than December 31, 2019. Genworth also believes that the sale of its stake in Genworth Canada would allow it to increase its financial flexibility, whether or not the Oceanwide Transaction is consummated.
"Genworth has significant expertise in implementing security protocols that satisfy data security concerns as a result of the successful implementation of our Enhanced Data Security Program," said Tom McInerney, president and CEO of Genworth Financial. "We are confident in our ability to satisfy the Canadian government's requirements in order to move forward with the sale of Genworth Canada, which is the best path forward to ultimately close the transaction with Oceanwide. The Oceanwide transaction continues to represent the best value for Genworth's shareholders."
Added LU Zhiqiang, chairman of Oceanwide: "We remain committed to the transaction with Genworth and share Genworth's commitment to bringing this process to a successful conclusion as soon as possible."
Genworth will provide a further update with respect to both ongoing transactions on its third quarter earnings call on October 30, 2019 at 8:00 a.m. ET.
About Genworth Financial
Genworth Financial, Inc. (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 mortgage insurance and long term care insurance. 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 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 closing of the transaction with Oceanwide, the receipt of required approvals relating thereto and any capital contribution resulting therefrom, as well as statements regarding the sale of Genworth Canada and the receipt of required approvals relating thereto. 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 sale of Genworth Canada 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 regulatory approvals, including the regulatory approvals needed for the consummation of the sale of Genworth Canada, or the possibility that they may delay the sale of Genworth Canada 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 sale of Genworth Canada may not be satisfied or the risk that the transaction with Oceanwide might not close regardless of a sale of Genworth Canada; (iv) continued availability of capital and financing to Genworth before the consummation of the sale of Genworth Canada; (v) changes in applicable laws or regulations; (vi) Genworth's ability to recognize the anticipated benefits of the sale of Genworth Canada; (vii) Genworth's and/or Oceanwide's inability to obtain regulatory approvals or clearances for the Oceanwide Transaction or extensions or renewals thereof, or the possibility that regulatory approvals or clearances may further delay the transaction with Oceanwide or will not be received prior to December 31, 2019 (and either or both of the parties may not be willing to further waive their contractual termination rights beyond December 31, 2019) or that materially burdensome or adverse regulatory conditions may be imposed in connection with any such regulatory approvals or clearances (including those conditions that either or both of the parties may be unwilling to accept) or that with continuing delays, circumstances may arise that make one or both parties unwilling to proceed with the transaction with Oceanwide or unable to comply with the conditions to existing regulatory approvals; (viii) the impact of changes in interest rates and political instability; (ix) further rating agency actions and downgrades in Genworth's financial strength ratings; (x) the amount of the costs, fees, expenses and other charges related to the commitment letter from Brookfield Business Partners L.P.; (xi) market conditions that may make it difficult to obtain funding; (xii) potential further impairments to Genworth's access to funding due to its credit or financial strength ratings and its financial condition; (xiii) the sufficiency of Genworth's internal liquidity sources to meet its needs and its access to capital may be limited or unavailable; (xiv) the risk that the transaction with Oceanwide may not be completed in a timely manner or at all; (xv) the risk that existing and potential legal proceedings may be instituted against Genworth in connection with the sale of Genworth Canada or the transaction with Oceanwide that may delay the sale of Genworth Canada or the transaction with Oceanwide, make them more costly or ultimately preclude them; and (xvi) other risks and uncertainties described in the Definitive Proxy Statement, filed with the SEC on January 25, 2017, and Genworth's Annual Report on Form 10-K, filed with the SEC on February 27, 2019. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Actual results may vary materially from those contained in the forward-looking statements. 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.