genworth hq

Genworth Financial’s corporate headquarters in Henrico.

Genworth Financial Inc. is selling its Canadian mortgage insurance business in an effort for the Henrico County-based company to complete its long-delayed acquisition by a Chinese investment firm.

Genworth said Tuesday that it has agreed to sell its majority stake in Genworth MI Canada Inc. to Brookfield Business Partners L.P., a Toronto-based investment firm whose assets include  real estate, renewable power, infrastructure and private equity assets.

The purchase price is $48.86 per share in Canadian dollars, for a total transaction value of about $2.4 billion in Canadian dollars. Genworth said it expects net cash proceeds of about $1.8 billion in U.S. dollars after adjusting for foreign exchange, fees and expenses.

The companies said they expect the deal to close by the end of 2019.

Brookfield Business Partners also has agreed to provide Genworth with up to $850 million in bridge financing if regulatory approvals for the transaction are not received by Oct. 31.

Genworth, which sells mortgage insurance and long-term care insurance, announced in July that it would seek a potential sale of its Canadian mortgage insurance business after the company was unable to get approval from Canadian government regulators for Genworth's proposed acquisition by China Oceanwide Holdings Group Ltd.

The proposed $2.7 billion acquisition by China Oceanwide was first announced in October 2016, and Genworth's shareholders approved the deal in March 2017.

However, the completion of the acquisition has been postponed multiple times as the companies sought approval from various state and federal regulatory agencies in the United States.  While all of the U.S. regulatory agencies have approved the deal,  Genworth said it was unable to make any "substantive progress" with Canadian regulators.

China Oceanwide also still has to get approval from regulators in China. Genworth said Tuesday that the companies have agreed to extend the merger deadline for a 12th time, to Dec. 31, 2019.

Genworth also said the sale of the Canadian mortgage insurance business would allow it to increase its financial flexibility, "whether or not the Oceanwide transaction is consummated."

"If the transaction is not consummated, Genworth may decide to retain the purchased shares for investment purposes or to explore alternatives with respect to the purchased shares, which may include decreasing its beneficial ownership, control and direction over common shares of Genworth Canada through market transactions, private agreements or otherwise," the company said.

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