The $US2.7 billion ($A3.5 billion) sale of US-based mortgage insurance group Genworth Financial to family-owned China Oceanwide Holdings is not expected to have a major impact on the local Australian business.
Genworth will become a standalone subsidiary of China Oceanwide.
“Genworth Australia understands that Genworth Financial Inc intends to maintain its existing portfolio of businesses, including Genworth Australia,” the company said in a statement to the ASX today.
Chairman James Riepe said Genworth’s senior management team will continue to lead the business from its headquarters in the US.
“Genworth intends to maintain its existing portfolio of businesses, including its … businesses in Australia and Canada. Genworth’s day-to-day operations are not expected to change as a result of this transaction,” says Riepe.
China Oceanwide is a private company founded by Chinese property billionaire Lu Zhiqiang. Its businesses include operations in financial services, energy, culture, media and real estate.
“Genworth is an established leader in both mortgage insurance and long term care insurance, which are markets that present significant long-term growth opportunities,” says Lu, chairman of China Oceanwide.
China Oceanwide will also be contributing $US1.1 billion of additional capital to Genworth to help it manage its debt. Genworth Life and Annuity Insurance Company will be split from the main company.
Goldman Sachs and Lazard are acting as financial advisors to Genworth.
Genworth Australia posted 25% fall in profit to $113 million for the six months to June.