It’s been 18 months since China Oceanwide Holdings Group, one of China’s largest companies, announced that it planned to buy Genworth Financial, one of the U.S.’s largest mortgage insurers, for $2.7 billion, but the deal still isn’t done yet.
The two companies announced Tuesday that they have withdrawn and refiled their joint notice with the Department of the Treasury’s Committee on Foreign Investment in the United States to allow the committee more time to review the transaction.
CFIUS is a governmental inter-agency committee that reviews transactions that could result in a foreign person or business controlling a U.S. business to determine if the deal will have an impact on national security.
The chair of CFIUS is the Secretary of the Treasury. Other CFIUS members include the Department of Justice, the Department of Homeland Security, the Department of Commerce, the Department of Defense, the State Department, and others.
According to Genworth and China Oceanwide, the companies withdrew their previous notice and filed a new one with CFIUS, which agreed to move directly to a 45-day investigation period after a one-day review period.
Tom McInerney, president and CEO of Genworth, said that the move is due to conversations with CFIUS about the security of its customer data.
“The refiling provides additional time for us to continue ongoing, productive conversations with CFIUS about the additional data security risk mitigation proposal that we presented to CFIUS in February,” McInerney said. “We believe our mitigation plan, which involves a U.S. third-party service provider, offers an effective solution for safeguarding the personal data of our policyholders.”
The companies caution that filing the new notice provides no guarantees that CFIUS will approve the deal.
“There can be no assurances that CFIUS will ultimately agree to clear the transaction,” the companies said in a release. “In addition to CFIUS clearance, the closing of the proposed transaction remains subject to other conditions, including the receipt of required regulatory approvals in the U.S., China, and other international jurisdictions.”
McInerney said that despite those remaining obstacles, the company is “fully committed” to the China Oceanwide deal, calling the deal the “best option” for the company’s shareholders.
“This transaction will allow Genworth to remain a viable and strengthened competitor in the long term care and mortgage insurance industries,” McInerney added.
LU Zhiqiang, chairman of China Oceanwide Group, also reiterated that the company is willing to see the deal through.
“We also remain committed to this transaction, which will enable us to bring Genworth's expertise in long term care and mortgage insurance to China as well as bring financial stability to Genworth and its businesses in the U.S.,” Zhiqiang said.
The deal was initially expected to close in the middle of last year, and now, the companies provide no estimate on when the deal may close.