RICHMOND, Va., July 22, 2015 /PRNewswire/ -- 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 council1 consultation 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.
About Genworth Financial
Genworth Financial, Inc. (NYSE: GNW) is a leading Fortune 500 insurance holding company committed to helping families become more financially secure, self-reliant and prepared for the future. Genworth has leadership positions in mortgage insurance and long term care insurance and product offerings in life insurance and fixed annuities that assist consumers in solving their home ownership, insurance and retirement needs. To help families start "the talk" about their futures and long term care planning, Genworth recently completed the first stage of its national #Lets Talk Tour to encourage conversations and information sharing. Headquartered in Richmond, Virginia, Genworth traces its roots back to 1871 and became a public company in 2004. For more information, visit genworth.com.
From time to time, Genworth releases important information via postings on its corporate website. Accordingly, investors and other interested parties are encouraged to enroll to receive automatic email alerts and Really Simple Syndication (RSS) feeds regarding new postings. Enrollment information is found under the "Investors" section of genworth.com. From time to time, Genworth's publicly traded subsidiaries, Genworth MI Canada Inc. and Genworth Mortgage Insurance Australia Limited, separately release financial and other information about their operations. This information can be found at http://genworth.ca and http://www.genworth.com.au.
Cautionary Note Regarding Forward-Looking Statements
This press release contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as "expects," "intends," "anticipates," "plans," "believes," "seeks," "estimates," "will," or words of similar meaning and include, but are not limited to, statements regarding the transaction to dispose of the Company's lifestyle protection insurance business and its anticipated financial impact. The sale of the company's lifestyle protection insurance business remains subject to certain closing conditions, including regulatory approvals, and the company cannot predict with certainty whether or when this transaction will close or the impact that foreign exchange fluctuations or any purchase price adjustments will have on anticipated proceeds. Forward-looking statements are based on management's current expectations and assumptions, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially due to global political, economic, business, competitive, market, regulatory and other factors and risks, including the items identified under "Part I—Item 1A—Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the Securities and Exchange Commission (SEC) on March 2, 2015 and as updated in Genworth's Form 10-Q filed with the SEC on April 29, 2015.
We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise.
1 In France, employees are represented by a works council which is directly elected by employees. Under French law, there is a statutory obligation to inform and consult with the works council prior to Genworth entering into the purchase agreement for its lifestyle protection insurance business. The works council is responsible for consulting with French management on a range of issues affecting these employees.
2 Sale price of €475 million and assumed foreign exchange rate of 1.1142 (€ to US$) as of June 30, 2015, less an adjustment for changes in stockholders' equity and other items since December 31, 2014 and is subject to change between now and closing.
SOURCE Genworth Financial, Inc.