China Oceanwide’s 1,400-day takeover odyssey is the epic journey that refuses to end amid deteriorating US-China ties
- China Oceanwide Holdings Group agreed in October 2016 to buy Genworth Financial in Richmond, Virginia for US$2.7 billion
- More than three years later, the transaction is still dragging on, while Genworth shares closed Monday at 51 per cent below the bid price
One of the last remaining deals of China’s now-aborted overseas acquisition spree is about to make its last attempt to limp across the finish line.
China Oceanwide Holdings Group, backed by property tycoon Lu Zhiqiang, agreed in October 2016 to take over Genworth Financial for US$2.7 billion. The idea was to give Richmond, Virginia-based Genworth a much-needed injection of capital, while providing the Chinese company a platform for further global expansion and expertise it could bring back home.
It was just one of the ambitious deals announced that year by Chinese companies, which agreed to buy US$235 billion of overseas assets ranging from Hollywood film studios to trophy hotel properties. Nearly 1,400 days later, the transaction is still dragging on and Genworth shares closed Monday at 51 per cent below the bid price.
The deadline for Oceanwide’s proposed purchase has been extended 15 times, and it’s now been pending longer than any other takeover in the US valued at US$1 billion or more, according to data compiled by Bloomberg. Genworth investors will soon find out whether the deal will die.
“The Genworth saga – all 3 3/4 years of it – is unique not only given the length of time that has elapsed since the two sides agreed to the deal, but also because of the twists and turns that have occurred along the way,” said Mark Palmer, an analyst at BTIG with a “neutral” rating on the stock.