UPDATE: June 28, 7:30 AM ET
The Department of Finance, Canada, which would receive any recommendation from the Office of the Superintendent of Financial Institutions, the workhorse of the regulatory & transaction oversight process under the Insurance Companies Act, said in an email “the examination of this transaction is still ongoing,” on Thursday, June 27.
U.S. long term care insurance giant Genworth Financial Inc. has another reckoning with its merger deadline June 30, 2019, and lobbying records show its representatives continues to meet with Canadian officials on the pending deal looking for more clarity in terms of merger review timing.
Genworth and China Oceanwide Holdings Group Co. Ltd. extended their previous deadline of April 30 to June 30 at the end of April to make more time for regulatory approval from Canada. It is the 10th such waiver since the originally-announced closing date. The deal was announced in late October 2016.
Since the most recent merger review progress report, Toronto-based lobbyist Andrew Steele of StrategyCorp Inc. has met with Ian Foucher, deputy director of financial sector policy with Finance Canada three times in May. He met or arranged to speak with Foucher on May 3rd, 17th and 31st, with regard to the timing of the regulatory process, according to the online database of the Office of the Commissioner of Lobbying of Canada. The act that created this Canadian office is designed to give transparency and accountability in the lobbying of public office holders.
Steele has met in person or over the phone to lobby and get information on the China Oceanwide merger at least 21 times with Foucher and other Canadian officials this year, according to the list of monthly communication reports. That does not include letters or other correspondence.
Monthly reports are only required for oral and arranged communications with designated public office holders but all communications (written, oral and even grassroots campaigns) with all public office holders require registration, according to a spokesman from the Office of the Commissioner of Lobbying. Consultants are required to register within 10 days of agreeing to undertake activities that could involve lobbying on behalf of a client, which often pre-dates any communication occurrences.
Other consultants from the Toronto firm have lobbied Canadian government officials such as Annette Ryan, an associate deputy minister, financial sector policy with Finance Canada earlier this year seeking merger review progress and approval.
Steele appears to have primarily been lobbying Foucher as well as others from Finance Canada but also met with or corresponded with advisors in the Prime Minister’s Office several times at the outset of the year. One early meeting was arranged with an official from Public Safety Canada.
Fellow StrategyCorp teammates, including the influential Leslie Noble and Martin Rust, are registered as active lobbyists for Genworth from the same firm, but Steele is the only one showing monthly communication reports for May.
Canadian lobbyists have until the 15th of the month after the communication has taken place to report it in the lobbyist communications registry. Communications that took place in May 2019 must be reported by June 15, so there is no activity yet posted for June.
Genworth representatives from the Canadian mortgage company subsidiary have met with government officials on typical business related to Genworth Financial Mortgage Insurance Company Canada’s business, on topics such as risk structure, mortgage financing, underwriting, housing policy, anti-fraud measures and discussions of legislative proposals
Genworth’s CEO Tom McInerney said on a conference call with investors and analysts May 1 to discuss first quarter 2019 earnings that although Genworth had not received any additional information requests or questions from Canada since the first part of February, it continues to “diligently pursue approval for the deal.”
McInerney said that the Canadian regulatory process “involves the complexities associated with national security related issues including the safeguarding of our customers’ personally identifiable information,” in a press release accompanying earning results on April 30.
The Canadian government’s concerns are similar to those that led to an enhanced data security program Genworth and Oceanwide committed themselves to through a third party vendor as part of the approval the parties got from the Committee on Foreign Investment in the United States.
Oceanwide has committed to a $1.5 billion contribution to Genworth over time following the consummation of the transaction in addition to the deal price of $5.43 per share.
No approval timeframe has been outlined by Canadian regulators, a Genworth spokeswoman noted last month in detailing the call.
“While Genworth and Oceanwide have fully responded to all information requests to date, the Canadian regulators have not outlined a timeframe for the completion of their review of the transaction or requested any additional information at this time,” the companies stated back in mid-March.
Steele, in an email, referred inquires to Genworth’s spokeswoman.
There will be no updates from the company on Canada and no comments on the matter until the company’s next public disclosure, she responded.
In addition to Canadian approval, Oceanwide will need to receive clearance in China for currency conversion and the transfer of funds for the deal to close.