China Oceanwide Holdings Group Co. Ltd. may need more time to acquire Genworth Financial Inc. than it had originally hoped, Genworth said Thurday.
Genworth reported that it and China Oceanwide have withdrawn and refiled the voluntary notice they sent to the Committee on Foreign Investment in the United States. The move should extend the committee's review period by at least 30 days, and possibly by 75 days.
Refiling the notice will give the committee more time to consider the China Oceanwide-Genworth deal, Genworth said.
(Related: China's Insurers Don't Know Their Own Risks)
Originally, China Oceanwide had hoped to complete the acquisition by Aug. 31.
Genworth said it and China Oceanwide are discussing the possibility of extending the deadline and "will make a final decision regarding the deadline in coming weeks."
The companies "remain committed to satisfying the closing conditions under the merger agreement as soon as possible," Genworth said.
Genworth is a large, Richmond, Virginia-based player in the mortgage insurance market. It has a large closed block of annuity business. In the past, the company was a major issuer of long-term care insurance. It's still selling some new long-term care insurance business, and it has billions of dollars of in-force long-term care insurance business on its books.
Low interest rates, inaccurate assumptions about policyholder behavior and tight restrictions on rate increases have hit Genworth and other issuers of stand-alone long-term care insurance hard in recent years.
Genworth's announcement of the deal delay includes a statement from Lu Zhiqiang, the chairman of China Oceanwide, which is based in Beijing.
"We are working with Genworth complete this transaction, so that we can strengthen Genworth's financial position and the viability of its long-term care business in the U.S. as well as bring Genworth's expertise in long-term care insurance to our country for the benefit of our aging population."
Tom McInerney, Genworth president, said the Genworth board believes completing the deal is the best option for shareholders and policyholders, and will help Genworth be a stronger competitor in the U.S. long-term care insurance industry.
