Genworth Financial Inc. (GNW.N) is looking to unload its stake in one of Canada’s largest mortgage insurers as the company continues to await approval from Ottawa for its proposed sale to a Chinese conglomerate.
Richmond, Va.-based Genworth said in a release Monday that it has “decided to consider strategic alternatives” for its 57-per-cent stake in Genworth MI Canada Inc. (MIC.TO), citing a lack of progress on receiving Canadian regulatory approval for its proposed sale to Beijing-based China Oceanwide Holdings Group Co. Ltd.
Oceanwide’s proposed US$2.7-billion takeover of Genworth was first announced in October 2016. Nearly three years later, the acquisition remains held up as Canadian regulators still have not approved the deal, while the United States signed off in 2018.
"MI Canada is one of our top-performing businesses. However, the lack of transparent feedback or guidance from Canadian regulators about their review left us no choice but to look at strategic alternatives for MI Canada that would eliminate the need for Canadian regulatory approval of the Oceanwide transaction," said Tom McInerney, president and CEO of Genworth, in a Monday statement.
"The transaction with Oceanwide has taken longer than any of us anticipated and we owe it to our stockholders to close it as soon as possible.”
Genworth and Oceanwide also said they have agreed to extend their acquisition deadline for the 11th time from June 30 to Nov. 30.
Genworth MI Canada is the country’s second-largest mortgage insurer, behind Canada Mortgage and Housing Corp., which is a federal agency.
Genworth MI Canada said in a statement it will monitor developments and that it remains focused on its strategic priorities.
"Our board of directors and the special committee of independent directors … will continue to monitor the status of that transaction and, as necessary, engage with Genworth Financial and other parties regarding the potential disposition of its interest in the company or other strategic alternatives," said Stuart Levings, Genworth MI Canada’s president and CEO, in a press release.
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