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Brookfield to acquire control of Genworth Canada
Posted on Tuesday, 13 August 2019 13:21
Brookfield Business Partners is acquiring a 57.0 per cent interest in Genworth MI Canada (Genworth Canada) from affiliates of Genworth Financial for CAD 2.40 billion (USD 1.81 billion).
Under the terms of the deal, the private equity group is purchasing 48.94 million shares for CAD 48.86 apiece and will pay an inital USD 700.00 million of the consideration at closing, with certain institutional partners to co-invest the balance.
Genworth Financial International Holdings controls 71.0 per cent of the stocks being sold in this transaction, with the remaining 29.0 per cent being sold by Genworth Mortgage Insurance.
Brookfield has agreed to provide Genworth Financial with a bridge loan of USD 850.00 million between now and closing of the deal, which will be repaid from proceeds of the sale.
The investor plans to finance the acquisition and the crediting from existing liquidity.
Genworth Canada is the largest private sector residential mortgage insurer in the country, providing cover to lenders and making home ownership more accessible to first-time buyers.
Subject to approvals from the Minister of Finance (Canada), the deal is expected to complete in the second half of 2019.
Genworth Financial believes the sale of its Canadian business would increase its financial flexibility, as well as being part of plans to complete a merger with Oceanwide Holdings Group.
The deal involves the Chinese business offering to buy the US-based annuity insurance provider for USD 2.70 billion via Asia Pacific Global Capital in 2016; however, this transaction is still awaiting approval from the Government of Canada.
Chief executive of Genworth Financial Tom Mcinerney said: “We are pleased to find such a high-caliber buyer for our interest in Genworth Canada.
“We look forward to working with Brookfield Business Partners through the sale process and required regulatory approvals and, ultimately, moving forward with our long-awaited closing of our merger with Oceanwide.”
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