Aug 14, 2019

Brookfield to buy majority stake in Canadian unit of Genworth Financial

Brookfield Business Partners (NYSE: BBU) agreed to buy a 57% stake in the listed Canadian unit of insurer Genworth Financial (NYSE: GNW) for C$2.4 billion, or C$48.86 per share (5.1% premium over yesterday's closing price).

Why it matters: It's been nearly three years since Genworth agreed to be taken over by China Oceanwide Holdings, but Canadian regulators have been unwilling to sign off. This divestiture should let Genworth jump that hurdle.

The bottom line: "The sale of the Canadian subsidiary comes at a sensitive time for Canadian-Chinese relations. The government is currently studying whether to ban Huawei from its 5G networks. U.S. charges late last year against the Chinese telco saw its CFO detained in Vancouver... Since then, Beijing has detained two Canadians, halted imports of canola and is now turning away meat shipments from Canada." Bloomberg

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