NEW YORK, N.Y. – A Chinese holding company has agreed to buy U.S. insurer Genworth Financial for about $2.7 billion, another example of China’s intense interest in American commerce.
Genworth shares fell sharply a day after the deal was announced.
The buyer, China Oceanwide Holdings Group Co., is based in Beijing and owns other financial services companies. It also has real estate investments in New York, California and Hawaii.
China Oceanwide says it plans to keep Genworth operating separately out of its Richmond, Virginia, headquarters and doesn’t expect its day-to-day operations to change. Genworth sells mortgage insurance, as well as long-term insurance.
The deal is expected to close in the middle of next year.
As they look to grow, Chinese companies have been investing heavily in the U.S. On Monday, for example, Chinese company HNA Group said it was paying $6.5 billion for about a 25 per cent stake in hotel chain Hilton.
China Oceanwide Chairman Lu Zhiqiang said in a statement Sunday that buying Genworth gives the holding company “long-term growth opportunities.” China Oceanwide said it will pay $5.43 in cash for each share of Genworth. In addition, China Oceanwide will give Genworth $600 million for debt maturing in 2018 and $525 million to help boost its U.S. life insurance businesses.
Shares of Genworth Financial Inc. fell 38 cents, or 7.2 per cent, to $4.84 in afternoon trading Monday.