Merger activity remained steady last week with four new deals announced and three deals completed.
The Genworth Financial (GNW) deal was finally officially terminated last week after years of delays. We tracked all the ups and downs for well over 4 years and posted 47 updates on the deal, making this the longest tracked deal in our Merger Arbitrage Tool (MAT). In spite of clearing all the U.S. federal and state regulatory hurdles, Genworth and China Oceanwide had to extend the completion of the merger almost 17 times due to years of government regulatory reviews in both the United States and Canada. Genworth sold its Canadian subsidiary to avoid continued delays in approvals in Canada.
Earlier this year both companies announced that they had put the deal on an indefinite hold. Three months later, Genworth exercised its right to terminate the deal in order to pursue its revised strategic plan, which includes a potential partial initial public offering of its U.S. MI (mortgage insurance) business.
This is the other risk in risk arbitrage where your capital gets tied up for an extended period of time due to regulatory issues and explains why deals like United HealthGroup’s acquisition of Change Healthcare (CHNG) and Lockheed Martin’s acquisition of Aerojet Rocketdyne (AJRD) are trading at significant discounts to the deal price.
You can find all the active deals listed below in our Merger Arbitrage Tool (MAT) that automatically updates itself during market hours.