Genworth Financial Inc (NYSE:GNW) has entered into a definitive agreement with China Oceanwide Holdings Group Co. Ltd, under which the later would acquire 100% of the former’s outstanding shares. In return, China Oceanwide would pay approximately $2.7 billion in cash, which means $5.43 per share. The company noted that the deal would be made through Asia Pacific Global Capital Co. Ltd, an investment platform of China Oceanwide. It should be noted here that the deal is yet to receive regulatory approval.

Under the agreement, China Oceanwide would contribute a total of $600 million to GNW, for addressing its debt, which matures in 2018. In addition to this, Genworth would also receive $525 million, for its US Life Insurance businesses. The company stated that it believes this to be the best strategic alternate, to enhance its share value. It should be noted here that GNW has already committed $175 million, to the US Life Insurance businesses. As such, the deal with China Oceanwide would ensure that the company continues to enjoy financial flexibility.

The non-executive chairman of the board at GNW, James Riepe, claimed that the agreement was signed, after an extensive review process, which had been conducted over a course of 2-years. The review comprised of input from financial and legal advisors and was supervised by the board. He reaffirmed the management’s belief that this was the best path forward, for the company’s stockholders.

Genworth noted that it would continue to have the same management and also operate from its current location, in Richmond, Virginia. Moreover, the company would continue to maintain its current business portfolio. However, it would operate as a subsidiary of China Oceanwide. Recently, GNW announced that it had successfully completed the review of its LTC claim reserves and had decided to make some preliminary changes, for the 3Q2016. As such, Genworth would be increasing its LTC claim reserves by $400-$450 million, pre-tax. A final decision on the matter would be announced, with the financial results of the 3Q2016.

Genworth Financial Inc (NYSE:GNW) declined by 8.06%, to close at $4.79 per share, at the end of the October 24 trading session, after having a trade volume of 83.39 million.