China Oceanwide Holdings Group’s $2.7 billion acquisition of Genworth Financial, one of the U.S.’s largest mortgage insurers, is now one step closer to fruition.
Earlier this year, China Oceanwide, one of China’s largest companies, and Genworth announced that they were withdrawing and re-filing 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 deal.
CFIUS is a governmental inter-agency committee that includes the Treasury, the Department of Justice, the Department of Homeland Security, the Department of Commerce, the Department of Defense, the State Department, and others.
CFIUS is tasked with reviewing 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.
Now, Genworth and China Oceanwide say that CFIUS has completed its review of the transaction and ruled that the deal will not generate any national security issues.
In connection with CFIUS approving the deal, Genworth and Oceanwide entered into a “mitigation agreement,” which requires Genworth to use a U.S.-based, third-party service provider to manage and protect the personal data of the company’s U.S. policyholders.
“We are pleased that CFIUS has completed its review of our transaction and look forward to working with Oceanwide to obtain the remaining regulatory approvals needed and satisfy other conditions necessary to close the transaction as soon as possible,” Tom McInerney, president and CEO of Genworth, said.
While CFIUS clearing the deal represents a significant step towards the deal being completed, it’s not the final step in the process.
According to the companies, the closing of the deal remains subject to other conditions, including the receipt of required regulatory approvals in the U.S., China and other international jurisdictions.
“Successfully concluding the CFIUS process is a major step in our efforts to complete this transaction, which will strengthen Genworth’s financial position and allow us to bring Genworth’s insurance expertise to China,” Lu Zhiqiang, chairman of Oceanwide, said.