Genworth Enters Into Exclusive Negotiations With AXA S.A. To Sell Lifestyle Protection Insurance Business
- M&A Deals
- 22.07.2015 01:00 am
Genworth Financial, Inc. (NYSE: GNW) announces it has entered into exclusive negotiations with AXA S.A. after receiving an irrevocable offer to purchase its lifestyle protection insurance business. The company expects to accept the offer and execute an associated purchase agreement upon completion of the French works council1consultation process. The sale price is expected to be approximately $510 million2 and the company will record an after-tax loss of approximately $310 million2 in the second quarter of 2015 related to the expected sale and pension settlement costs. Net proceeds from the transaction, net of pension settlement costs and transaction related expenses, are estimated to be approximately $400 million2. Genworth plans to use these proceeds to advance compliance with the Private Mortgage Insurer Eligibility Requirements and to reduce debt levels. The sale is expected to close by the end of 2015 and is subject to other customary conditions, including requisite regulatory approvals.
"This transaction is another important step toward simplifying our business portfolio and increasing the financial flexibility and strength of Genworth," said Tom McInerney, President and CEO. "This sale also provides the opportunity for our employees in the business and the purchaser to have a strong business to grow going forward."
Since October 2012, the company has identified its lifestyle protection insurance business as non-core and communicated its interest to sell it as economic and business conditions permitted.
Barclays and Sidley Austin LLP are advising Genworth on this transaction.