Genworth Financial Inc. was given approval from a U.S. national security panel for its $2.7 billion buyout by China Oceanwide Holdings Group Co.
The Committee on Foreign Investment in the U.S., which reviews foreign acquisitions of U.S. companies, said there are “no unresolved national security concerns with respect to the proposed transaction,” according to a statement Saturday from Genworth.
The Richmond, Virginia-based insurer has sought to assuage concerns about personal consumer information becoming more vulnerable after the deal with the China-based company. After refiling with CFIUS multiple times, the two companies agreed to use a third-party provider to help protect consumer data.
Genworth Chief Executive Officer Tom McInerney has called the China Oceanwide deal, which was announced in 2016, the “ best option” for the company after it was hit by losses on its long-term-care coverage, which pays for nursing-home stays or home-health aides.
“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, China Oceanwide’s chairman, said in the statement.
The approval comes even as President Donald Trump has clashed with Chinese officials over trade. Trump threatened to slap tariffs on some Chinese imports, while China vowed to retaliate on everything from U.S. soybeans to airplanes. He has stopped two foreign deals since taking office in 2017: Broadcom Ltd.’s hostile takeover of Qualcomm Inc., and Lattice Semiconductor Corp.’s sale to a Chinese-backed firm.
The decision clears one hurdle for the insurer. The companies still need to secure approval from some other regulators, according to the statement.
CFIUS reviews are confidential and the panel declined to comment on the Genworth decision. In its most recent report to Congress, CFIUS highlighted that insurance is among the industries the panel pays particular attention to because insurers hold potentially sensitive data about people and businesses that are important to national security.
Genworth shares closed Friday at $3.81 in New York, that’s up 23 percent this year, but down 65 percent from five years ago before the troubles in long-term care insurance became apparent.