China`s Oceanwide Holdings Co Ltd is aiming to close its $2.7 billion acquisition of U.S. insurer Genworth Financial Inc by the end of the year after securing approval from a U.S. government panel, a senior executive said on Tuesday.
The two companies in April refiled their application to the Committee on Foreign Investment in the United States (CFIUS), a U.S. government panel that examines foreign acquisitions with regard to national security concerns.
The companies refiled the application for the second time in July.
Han Xiaosheng, executive director and president of Oceanwide Holdings, told reporters on Tuesday that CFIUS`s approval by the end of next month was difficult, and that the company would try to close the deal by the end of this year.
"We are still working on it," Han said, referring to the Genworth deal. "It could be relatively difficult to receive it (CFIUS approval) by the end of October. Therefore we try to get it by the end of the year."
The deal was earlier expected to close by the middle of the year, but the outlook has been clouded by a more conservative stance taken by CFIUS under President Donald Trump towards Chinese takeovers of U.S. companies.
Trump last week prevented a Chinese-backed private equity firm, Canyon Bridge Capital Partners, from buying U.S.-based chipmaker Lattice Semiconductor Corp in a $1.3 billion deal.
Oceanwide, a Beijing-based investment firm founded by low-profile but well-connected billionaire Lu Zhiqiang, agreed in October last year to pay $2.7 billion in cash for all Genworth shares.
The Chinese company also committed another $1.12 billion to cover Genworth debt maturing in 2018, as well as life insurance claims charges faced by the US firm spun out of General Electric in 2004.
"The deal is being processed a bit slowly, but there`s no big trouble to reverse it," Han said. "It`s quite normal that the CFIUS has its own thoughts."
When asked if Oceanwide planned to refile its application with the CFIUS for the third time, the Chinese company executive said that option depended on the pace of the response in the current round.
"Genworth is a very important platform for us as there`s a blank in China`s insurance industry, in the long-term care-related business," he said, adding that the U.S. life insurer could fill that gap with its experience and products.
Han said that Oceanwide would use its Hong Kong-listed unit, China Oceanwide International Financial Ltd, as the main platform for its future overseas acquisitions in the financial services sector.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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