Status:  Clearance; Mitigation

Acquirer:  China Oceanwide Holdings Group Co. Ltd (China)

Acquired:  Genworth Financial Inc. (US)

Value:  US$2.7 billion

Industry:  Financial Services

US Stock MarketUPDATE:  On June 9, 2018, the mortgage and long term care insurance company Genworth Financial, Inc., and the Chinese financial holding group China Oceanwide Holdings Group Co., Ltd., issued a joint press release announcing that CFIUS “had concluded its review . . . of the transaction contemplated by the Agreement and Plan of Merger, dated October 21, 2016, . . . and determined that there are no unresolved national security concerns with respect to the proposed transaction.”  (Genworth Financial, Inc., Form 8-K, June 11, 2018, SEC Filing.)  “In connection with the CFIUS review of the proposed transaction, Genworth and Oceanwide entered into a mitigation agreement which, among other things, requires Genworth to use a U.S.-based third-party service provider to manage and protect the personal data of Genworth’s U.S. policyholders.” (Id.)   On February 6, 2018, Genworth Financial announced that the parties had, for the third time, withdrawn and refiled the joint CFIUS filing relating to the acquisition of Genworth Financial by China Oceanwide to provide CFIUS with “detailed information about an additional data security risk mitigation proposal involving a US third-party service provider.” (Genworth Financial Press Release, Genworth Financial, Inc., Form 8-K, Ex-99.1, Feb. 6, 2018, SEC Filing.) 

Posted on February 8, 2018

Status: Refiling; Mitigation Pending

On February 6, 2018, Genworth Financial, Inc. issued a press release announcing its quarterly financial results in which it discussed the status of its withdrawn CFIUS filing relating to the acquisition of Genworth Financial by China Oceanwide Holdings Group Co., Ltd. (See Genworth Financial Press Release, Genworth Financial Form 8-K, Ex-99.1, Feb. 6, 2018, SEC Filing.) Genworth Financial stated that the parties “have re-filed their joint voluntary notice with the Committee on Foreign Investment in the United States (CFIUS).” (Id.) Genworth further described that in the newly refiled notice, “the parties have provided CFIUS with detailed information about an additional data security risk mitigation proposal involving a US third-party service provider.” (Id.) In the meanwhile, Genworth stated that will turn to borrowing for financing “[d]ue to the delay in obtaining regulatory approvals and the closing of the proposed transaction” with Oceanwide. (Id.)

Posted on November 30, 2017

Status: Withdrawn (3rd time), Refile Pending

The president and CEO of Genworth Financial Inc., Tom McInerney, stated in a press release that Genworth Financial and China Oceanwide Holdings Group Co., Ltd. “expect to refile our joint voluntary notice with the Committee on Foreign Investment in the United Stated (CFIUS) in the near term.” (Genworth Financial Press Release, Genworth and Oceanwide Extend Merger Agreement, Genworth Financial Inc. Form 8-K, Ex-99.1, Nov. 29, 2017, SEC Filing.)  Mr. McInerney stated that the parties are also in “discussions with a U.S. third-party service provider about proposed mitigation approaches.” (Id.)  According to a Reuters news article, the US third party service provider could be intended to “administer policies in the United States and wall off all data from the parent company.” (Reuters, China Oceanwide, Genworth Financial extend $2.7 billion merger deadline, Nov. 29, 2017.)

As previously discussed in October, the parties “withdr[ew] their joint voluntary notice with the Committee on Foreign Investment in the United States (CFIUS), with an intent to refile the transaction with additional mitigation approaches, including potentially working with a U.S. third-party service provider.”  (See Genworth Press Release, Genworth and Oceanwide Provide Update on CFIUS Application, Oct. 2, 2017.)    In relation to the timing of the CFIUS process, the parties agreed to “a second waiver and agreement” to their merger agreement that “extends the previous deadline of Nov. 30, 2017, to April 1, 2018, and allows additional time for regulatory reviews of the transaction.”  (Genworth Financial Press Release, Genworth and Oceanwide Extend Merger Agreement, Genworth Financial Inc. Form 8-K, Ex-99.1, Nov. 29, 2017, SEC Filing; see Second Waiver and Agreement, id., Ex-2.1.)

Posted on October 2, 2017

Status: Withdrawn (3rd time)

In an October 2, 2017 press release, Genworth Financial Inc. and China Oceanwide Holdings Group Co., Ltd. “reported that they have withdrawn their joint voluntary notice with the Committee on Foreign Investment in the United States (CFIUS), with an intent to refile the transaction with additional mitigation approaches, including potentially working with a U.S. third-party service provider.”  (See Genworth Press Release, Genworth and Oceanwide Provide Update on CFIUS Application, Oct. 2, 2017.)  The statement confirmed that “both parties are fully committed to continuing to work on robust mitigation proposals.”  (Id.)  Once CFIUS accepts the refiled joint voluntary notice, it will “commence a new 30-day review period, which may be followed by an additional 45-day investigation period.”  (Id.)

Posted July 17, 2017

Status: Withdraw and Refile (2nd time)

Genworth Financial, Inc., issued a press release on July 13, 2017, in which it reported an update to its pending CFIUS notification filing with China Oceanwide Holdings Group Co., a  privately held international financial group based in China seeking to acquire Genworth.  The statement confirmed that the parties “have withdrawn and re-filed their joint voluntary notice with the Committee on Foreign Investment in the United States (CFIUS) a second time to provide CFIUS more time to review and discuss the proposed transaction between Genworth and Oceanwide contemplated under the merger agreement entered into by the parties on October 21, 2016.”  (Genworth Press Release,  Genworth and Oceanwide Provide Update on CFIUS Application and Completed Reinsurance Agreements Related to the Proposed Transaction, July 13, 2017.)  Please see our discussion of the original withdrawal and re-file below.  Genworth further stated that they “continue to actively engage in discussions with CFIUS; however, there can be no assurances that CFIUS will ultimately agree to clear the transaction” and that “it now appears that the timing of the regulatory reviews will likely delay the completion of the transaction to later than the originally targeted time frame of the middle of 2017.”  (See id.)

Posted on May 1, 2017

Status: Withdraw and Refile

Genworth Financial, Inc., issued a press release on May 2, 2017, in which it reported an update to its pending CFIUS notification filing with China Oceanwide Holdings Group Co., a  privately held international financial group based in China seeking to acquire Genworth.  The statement confirmed that “[o]n April 28, 2017, Genworth and Oceanwide withdrew and re-filed the joint voluntary notice to the Committee on Foreign Investment in the United States (“CFIUS”) to permit more time for review and discussion with CFIUS.”  (Genworth Press Release,  Genworth Financial Announces First Quarter 2017 Results, Ex-99.1, Form 8-K, May 2, 2017, SEC Filing; see also Genworth Form 10-Q, May 2, 2017, SEC Filing.)  Genworth further stated that they anticipate the transaction closing in the middle of 2017.  (See id.)

Posted on February 14, 2017

Status: New Filing

Genworth Financial, Inc., a U.S. insurance company,  and China Oceanwide Holdings Group Co., Ltd., reported that they are “waiting for the CFIUS staff to initiate the review period” in connection with the proposed acquisition of Genworth by China Oceanwide Holdings.  (Genworth Financial, Ex-99.1, Form 8-K, Feb. 7, 2017, SEC Filing.)

Posted on February 6, 2017:

Status: Upcoming/New Filing

Genworth Financial, Inc., a U.S. insurance company, reported that the “completion of the CFIUS review process” is a condition to completing its proposed acquisition by China Oceanwide Holdings Group Co., Ltd., a  privately held international financial group based in China.  (Genworth Financial Inc, Schedule 14A, Jan. 25, 2017, SEC Filing.)

Posted on November 16, 2016:

Status: Potential Filing

On October 21, 2016, China Oceanwide Holdings Group Co., Ltd., a privately held international financial group based in China, and Genworth Financial, Inc., a U.S. insurance company, announced that they have entered into a definitive agreement under which China Oceanwide will acquire all of the outstanding shares of Genworth for a total transaction value of approximately US$2.7 billion.   (See Genworth, Form 8-K, Oct. 21, 2016, SEC Filing; Genworth Press Release, China Oceanwide to Acquire Genworth Financial, Oct. 23, 2016.)   According to Genworth’s Form 8-K filing, the transaction is subject to approval by the Committee on Foreign Investment in the United States (CFIUS).

Mr. Lu Zhiqiang, Chairman of China Oceanwide, stated in the Genworth press release “we have structured the transaction with the intention of increasing the likelihood of obtaining regulatory approval.”  (See Genworth Press Release.) In a recent earnings call, Thomas J. McInerney, President, CEO & Director of Genworth Financial stated that  “we and China Oceanwide will commence the review and approval processes with the regulators involved, including CFIUS, or the Committee on Foreign Investment in the U.S., by completing applicable filings within the coming weeks.”