Shotgunner51
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In new China M&A push, Oceanwide strikes $3.8 bln deal for ex-GE insurer Genworth
23 Hours Ago Reuters
23 Hours Ago Reuters
- China Oceanwide Holdings pledged $3.8 billion in a deal to take control of U.S. insurer Genworth Financial, the latest marker of Chinese firms accelerating a drive overseas.
- Founded by low-profile but well-connected billionaire Lu Zhiqiang, the Beijing-based investment firm agreed to pay $2.7 billion in cash to buy all Genworth shares, the firms said in a statement on Sunday. The price offers a modest 4.2 percent premium to Genworth's Friday closing price.
- Oceanwide also committed another $1.12 billion to cover Genworth debt maturing in 2018, as well as life insurance claims charges faced by the firm spun out of General Electric in 2004.
- Genworth has seen its share price fall nearly two-thirds in the last 24 months while battling low interest rates and trying to stabilise its troubled long-term health insurance arm.
- The striking of a near-$4 billion deal by an unlisted Chinese firm that few outside the country know highlights how determined mainland buyers have become in a hectic year for chasing overseas assets. So far, 2016 has seen Chinese firms launch a record $181 billion of overseas mergers and acquisitions — about 70 percent more than the whole of last year.
- Chinese investment holding firms have joined insurers like Fosun International and unlisted Anbang Insurance Group in leveraging accumulated capital to buy global assets. Some recent purchases have also come from Chinese property companies, keen to reduce reliance on their home market.
- Some recent Chinese bids have attracted intense regulatory scrutiny overseas. But rarely has an insurance deal by a Chinese acquirer been blocked outright by international watchdogs, according to people familiar with these transactions.