Genworth Financial has exercised its right to terminate its merger agreement with Beijing-headquartered conglomerate China Oceanwide Holdings Group, the New York-listed company says in a statement.
China Oceanwide and Genworth will continue to explore potential opportunities to bring long-term care insurance and other similar products to the Chinese insurance market in the future, the US company says.
Terminating the agreement allows Genworth to pursue its revised strategic plan without restrictions and without uncertainty regarding its ultimate ownership, which might impact the company's ability to successfully execute the plan, the statement says.
Mr James Riepe, non-executive chairman of Genworth, said, “Genworth's board of directors has concluded that Oceanwide will be unable to close the proposed transaction within a reasonable time frame and that greater clarity about Genworth's future is needed now in order for the company to execute its plans to maximise shareholder value. Thus, the board decided to terminate the Oceanwide merger agreement." The deal, which was proposed in October 2016, was to have been worth $2.7bn had it gone through. It stalled over regulatory reviews and failure to secure financing.
Mr Tom McInerney, Genworth president and CEO, said that Genworth continues to share Oceanwide chairman Lu Zhiqiang's vision of bringing long-term care solutions to the aging population in China. “Both parties believe there are significant, compelling opportunities to address critical societal needs outside of the US," he added.
Genworth Financial is a Fortune 500 insurance holding company with leadership positions in mortgage insurance and long-term care insurance.