Genworth’s Acquisition By China-Based Firm Faces Another Regulatory Delay

The proposed acquisition of Henrico County-based Genworth Financial Inc. by a China-based company is facing a regulatory delay that is likely to push the deal past its planned completion date.

Genworth, an insurance company with thousands of employees in Virginia, announced in October that it had agreed to be acquired for about $2.7 billion by China Oceanwide, a privately held financial company based in Beijing.

Genworth shareholders approved the deal in March, but the companies also must get various U.S. and foreign government regulatory approvals. That includes a review by the Committee on Foreign Investment in the United States, or CFIUS, a federal government committee that reviews transactions resulting in control of a U.S. business by a foreign entity.

Genworth and Oceanwide said late Thursday they have re-filed a joint notice with CFIUS to provide the committee with more time to review the transaction. It is the second time that the companies have re-filed the notice with CFIUS. The first time was in April.

The re-filing gives CFIUS a new 30-day review period, which may be followed by an additional 45-day investigation.

Genworth said Thursday that it and Oceanwide "continue to actively engage in discussions with CFIUS; however, there can be no assurances that CFIUS will ultimately agree to clear the transaction."

The companies had initially planned to close the deal by mid-2017. On Thursday, Genworth said the companies are discussing an extension of the Aug. 31 deadline set in the merger agreement.

The top executives of both companies issued statements reiterating their support for the deal.

Thomas McInerney, Genworth's president and CEO, noted that the proposed deal is the best option for shareholders.

"This transaction also achieves the best outcome for the policyholders of our insurance companies and other important stakeholders," McInerney said. "In addition, Genworth believes this transaction provides significant benefits to Americans because it allows Genworth, the leader in long term care insurance in the U.S., to remain a viable and strengthened competitor in the long term care insurance industry."